Kotaku
Thanks to Alex for pointing out to us that the XBox 360's firmware has apparently been successfully hacked, allowing backup games to be played on the console. Just for clarification, we're not posting this so you all warezing cockroaches can go chittering off, but more because we're constantly impressed by the ingenuity of modders. And let's face it: although hacks like this will primarily be used to steal games, nevertheless, you do have a legal right to back-up your games... a right companies like Microsoft and Sony design their systems specifically to thwart.
The word of warning: even if you use this for perfectly legitimate reasons, Live is probably going to suss you out and ban you, so probably best only to muck about with it if you're not into online multiplayer.
Thanks Ryan Block for the image!
XBOX 360 Firmware Hack Is Released [Team Xecuter]
