There’s a handful.
1) you can remove the DVD drive
2) Hard drive locking feature is disabled, and makes it easier to upgrade or recover from a failed drive
3) you can customize or remove the boot animation
4) if you fuck up and flash a bad bios onto a modchip it’s easier to recover from than flashing a bad BIOS onto the console itself.
These are rather general benefits and can change a bit based on what kind of console you have and how much you’re willing to spend. If you don’t care about how much cash you drop, buy an X3 from some eBay scalper and go balls out. You’re more likely to end up with an Aladdin XT which blows.
In fact, depending on what version your console is, the Aladdin XT modchip can even be a downgrade - all a modchip is in general terms is an easy way to run a modified BIOS on your Xbox. Some Xboxes require a modchip to do this, some are basically the same as using an Aladdin, and some are even better than using an Aladdin as they have better compatibility than the Aladdin.