There are a lot of forums specifically for this topic. Google is your friend
The way it works: If your modem MAC address is not provisioned in the ISP's system, then there is a "block" bootfile sent to the modem. The bootfile is what controls how much bandwidth you are given, basically. Custom modem firmwares trick the ISP into thinking the modem is still getting the block bootfile and at the same time let you download whatever bootfile you want from their server or even load it straight into the modem's memory. A different DNS, as you said, is required to bypass their block page. It's different for some ISPs, though. On some, you have to clone someone else's MAC from a different node. It depends on how their provisioning system is set up.
Cloning someones MAC can get that person in trouble, for instance, if the RIAA asks who the IP is for, the ISP can pull the modem up by IP, then pull whatever customer information is attached to that MAC and find the person you cloned. Same thing would happen if you went over any bandwidth limit using their MAC. It would suspend/throttle both of your modems and you would have to clone another MAC. Furthermore, as YOUR information is not actually in the ISP's database, it is a lot harder for them to track you by IP (but still possible).
That was my initial response too. I don't see why this couldn't be discussed as long as it doesn't go into the process of actually installing 3rd party firmware on a modem, or suggesting someone actually do this. Doing this would get you banned from your ISP, and possible jail time or a large fine thats definitely not worth it I would think.
Installing custom firmwares on your own purchased modem is not illegal (using it to steal internet is, obviously). I do not think using it to clone a modem in your own name and at the same residence is illegal, either. It can be used for diagnostic purposes. There
is the potential for legit use, just like filesharing lol