The code powering the PS3's first modchip is now officially out there, meaning anyone with an internet connection and a USB microcontroller can get under their PS3's skin.
The PSGroove, a new jailbreak solution engineered from the same code that powers the first modchip, is touted as an "open source" PS3 exploit, meaning it's not out for profit, not being sold by anyone and doesn't have a company name behind it to pin a lawsuit on.
This development renders Sony's impending court showdown with Australian retailers a shallow public relations gesture at best. Why? Because defeating them would be like cutting one head off a million-headed hydra; now that PS3-cracking code is out there online, and the only device you require to operate it is a legally-available PC accessory, anyone that has the will to back-up their PS3 games and the ability to read an internet forum will be able to do it.
As of right now, the standard PSGroove code doesn't let you play backups of your games. But now that it's out there in the hands of hackers, that feature will be with us soon, if it isn't already.
I'll be honest, the codework on this flies a mile over my head, but you can get a full account of how it all works at the link below.