To get rid of the E74 error, requires you to reflow the board. That means taking it apart, rubbing flux all over the thing and taking a heat gun to it then replacing the crappy x-clamps. I still have a launch xbox that works perfectly fine and I used to fix these things for a living. PS3's I fixed just as many of them (mainly blu-ray players but sometimes "yellow light of death").
IF you get it working again, you can install TVersity or PlayOn on your computer and stream music/movies/pics to your xbox, BUT to run it the xbox needs to be able to run the regular firmware.
the HDD and DVD drive are sata but the dvd drive can not be used in a computer unless someone comes up with some crazy drivers. HDD can be formatted to anything.