[KraftSLU]

Thanks gas, that clears it up a little bit. But here is a key part of that articale:

His circuit board managed to intercept key traffic flowing through the hardware and gave Huang the keys, as well as the unique serial number, of his machine.

This is nothing more than another mod chip. by soldering a new chip to certain connections it is allowing him to bypass all the registry protection the xbox has. That way you can play burned CD's and DVDs and such. The same thing has been possible for the ps2 for quite some time and from what I understand the gamecube has been cracked now also. Its only a matter of time before this happens to any system, I don't see how this will affect online play though.