Sevey13 was asking "if I can still connect to online services" and worried if they'll get banned, not about actually playing the customs.
Which I will answer, yes you can still connect online with the latest RB3 update with custom songs in your drive. You will not get banned or anything, customs songs will still appear in your song library but attempting to play them will simply just crash the game. You can still play any legit songs just fine while connected online and having customs installed.
I only just got the game so I have none of the paid DLC, but I am interesting in buying it
For buying DLC, if you don't want to deal with the hassle of swapping updates just to purchase dlc, I recommend installing the separate "Rock Band Music Store" app and purchasing DLC from there.