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Hacks such as Prestige Hacks and Level Hacks/ Unlocks are usually client to server interactive. With the case of MW2, the hack changes your stats on the servers .
Games such as Call of Duty 4, have a local file where all your stats are saved as Profiles.
Client side hacks would be ESP (Hitboxes), AImbots, SIlent Bots, Fullbright, No Sky, No Flash etc which modify only your client game by injecting code with a graphical overlay over DirectX Graphical game outputs, thus showing executing the coded menu/hack you injected locally. It does not affect the server by any means but rather use the Client sided info to modify your gameplay outputted by the soldier.
I hope this helped you. And in Modern Games, level hacks are more of a server sided thing rather then a saved stats file on your PC.