Is this the way that caps are made? I thought that it was done through the ISP's, not through your actual modem... So theoretically there should be a way to take this cap off of your modem right?

You can remove the cap set in place, however, that would be deemed illegal and would land you in court for stealing bandwidth (don't argue... you won't win in a court battle).  I won't say how to uncap your modem, but they are out there.

Aldephia is 3Mbps cap, which is typical of many cable internet companies (though some have raised their download speeds to 4Mbps).  The caps are set in place to distribute bandwidth evenly and effeciently... not where one person uses 10 Mbps to saturate the network, therefore slowing others down.  However, upping the cap to 4Mbps could send Aldephia the red flag (if they monitor) and they'd pull the plug on your service (probably something in the ToS).

I think they do it through your modem. I have a Motorola SB4220 which can technically go up to 38Mb up 30Mb down. Comcast sets it to 4Mb/384Kb. For cable, it's set through Docsis.

When you power up your modem, your modem will contact a TFTP server, which will then request a config file that your modem will read in order to get it's settings.  This file contains the upload rate, download rate, etc.  Problem is, a lot of broadband modems will automatically update the flash bios, thereby disabling any attempt to upload your own config file because of protection (i've tried). 

Yep, basically tricks your modem into thinking you're the TFTP server... But has reno has said, use at your own risk.  If you get caught, you might get a warning, have your cap lowered, or lose your connection.  Not to mention you might land in court.

If you do decide to do it, don't be an idiot and set the cap to something OBVIOUS (like 7Mbps while everyone else is 3Mbps).  They may monitor usage how how much traffic is passing through the system.  Another advice would be to not leave the new cap rate on forever.  Maybe temporarily (like 2 days or so) so you won't run into trouble.

There are two really popular sites that offer the tools needed for uncapping.

I won't post the links, but the names are:

TheoryShare
&
TCNISO


Such tools they offer are:

DHCP Force
NETBoot
SnmpCfgAdmin 1.4
TFTPD32
ConfigEdit
CMFirm3

These tools are utilized to great extent when your firmware has been flashed using NetBoot. One site will try to convince you that a serial cable is needed to flash your firmware, when, in fact, it is not needed. This particular site generates most of its money from serial cables, pre hacked modems, Sigma 1.3 thru 1.5b firmware, and a host of other things, thus encouraging n00bs to buy their products. The other site just sales modems mainly.

Success has been reached mainly using the Surfboard cable modem series (SB3100, SB4100, SB4200, SB4220), although some people have reached their goal using certain RCA & 3COM cable modems. Until very recently, SB5100 cable modems had been unhackable. With the development of a TSOP Programmer dubbed "Blackcat", SB5100 cable modems are now added to the list of hackable, undetectable cable modems. The infamous Sigma firmware is being developed for the SB5100 cable modem and will be available soon.

A word of advice to those who plan to venture into the world of uncapping:

This should not be regarded as a hobby, or something to do just to have fun. If you are bandwidth starved, you may want to consider moving to Texas where you can get FIOS right now (ask Clarence about FIOS...he's blazing fast). Uncapping is against the law! Penalties can and in most cases will result in you being banned for life from your ISP and many others (especially if you use the same name). Jail or prison time is always an option. Don't think that you will get a tap on the wrist just because you claim you didn't know what you were doing. ISP's are fully aware that it is a technical & complex set of steps that are needed to be carried out in order for an individual to uncap his/her cable modem. They will be pissed off & will return fire immediately. Uncapping is not the thing to do and is recommended to evade it at all costs

I wouldnt bother trying to un-cap your modem, it’s a lot of work (and its not like you can just un-cap it once, you have to continue to keep un-capping a couple of times a day).