Well if this is indeed true I suppose it was inevitable, but at the same time quite sad that people may soon be playing free games. Shamelessly stolen from AVforums. I haven't linked directly to the article for certain reasons.
Xbox360 DVD FIrmware Hacked - Video
http://www.youtube.com/watch?v=XyZQ4k7Bi-8
As you know TheSpecialist and his team were working on a modified firmware for the Xbox 360. He already managed to make one for the original Xbox a while ago, and he announced this method was highly likely possible with the Xbox 360 too. From TheSpecialist on xboxhacker.net:
Months of hard work have come to an end. The 360 FW security details were posted a few days ago already, so why not make it officialIt's been done.
And no, the team decided not to release a hacked FW. The security details are proof itself. The team advocates hacking, not piracy.
What is this? A bit more info...
The hack is a modified firmware of the Xbox 360 DVD-ROM drive.
As you (should) know, all Xbox 360 executables (XEX files) are signed by Microsoft (with a private key only MS has). This means that if you try to change anything to the XEX file, the signature will be wrong and the file will not boot.
Now ... to protect from booting an exact 1:1 copy of a game from a DVD-R or other recordable media, microsoft gave each XEX file a 'mediaflag'. This mediaflag tells the Xbox 360 from which media (cd-r, dvd-r, dvd+r, dvd-rw, hdd, dvdxbox, dvdxbox360, ...) the XEX is allowed to boot. Changing this mediaflag in the XEX header is not an option as it'll break the signature of the file (see above), so ... what's done in this firmware hack is 'break' the detection of the disc.
Retail games usually get a mediaflag where they only allow 'dvdxbox360' (Xbox 360 discs). The modified firmware will trick the DVD drive into reporting a DVD-R (or other) as a DVDXBOX360 to the Xbox 360.
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