This really eases the pain of getting past the security checks. The modchip will fake authentication signal back to the drive chip, validating that whatever is in the dvd-rom is authentic.
Although it doesn't sound like much, you're bypassing the biggest obstacle.
Why Software too?
There are many, many reasons for this.
1. Nintendo is very active against piracy. They often roll out "console updates" which contain 90% anti-piracy measures, 10% needed gameplay stuff (3D engine, accessory support, etc).
Release groups dissect what's needed from what's not and issue them separately. With the Homebrew Channel, the program "Wad Manager" and the appropriate file, you can update your machine without changing its current firmware version.
Why is the firmware version important?
With every Nintendo update, system vulnerabilities are patched. You want to lock into the 3.2 firmware and hold onto it because it is the most hack friendly.
Also, the exact same software updating routine can also install WiiWare and Virtual Console titles to your dashboard. Instead of running a console update, you're directing the Wad Manager to install a game instead. It's awesome.
The Homebrew Channel is MUCH more than a means of getting a software bootloader onto your dashboard. With the modchip, you're launching directly from the official disc channel.
Your system may work fine today, but give it a few months, who knows?