This is from an ATF letter addressing this very issue;
"It is generally unlawful for a person to transfer or possess a large casacity ammunition-feeding device as provided in 18 U.S.C., section 922(w). The prohibition does not apply to the possession or transfer of any large capacity ammunition-feeding device otherwise lawfully possessed on or before the date of enactment of this subsection. A magazine manufactured prior to to September 13, 1994, would not be a large capacity ammunition-feeding device as defined.
If an altered ammunition magazine could no longer function in the firearm for which it was originally designed, it is our opinion that a new magaine has been manufactured. The latered magazine would be a large capacity ammunition-feeding device, and it would be subject to the prohibition in Section 922(w). If the magazine has minor nodifications performed, such as cutting an addition slot for a different magazine release, and ti still functions in the original firearm for which it was designed, we do not believe it would be considered a new magazine. However, if major changes are made, it is possible that anew magazine has been manufactured. It may be necessary to examine a sample of the magazine for a determination."
As stated above, this if from an ATF letter dated 31Jul2002. You may view the letter in PDF format at the following link;
http://members.aol.com/hs2000fanatic/letter.pdf