Apparently somebody hacked the DVD drives firmware to spoof the disc type (similar to what bitsetting does for movie DVD's, only this is on the firmware side) which allows DVD-r copies of games to work. Normally the disc type is calculated as part of the signature, but since it can be faked to the original setting now, the signature remains valid, thus the copied games work. Thus naturally, they can't run arbitrary code since the signature check is still in place.
I was wondering why somebody didn't try this before. It would allow you to play copied games on xbox live without getting banned as well since the main xbox firmware hasn't been tampered with, nor has any other hardware been modified in any way.
I suppose microsoft could detect this on live by scanning the dvd drives firmware, but the data contained on the firmware itself could easily be spoofed. The other software on the xbox has to relie on whatever the firmware itself says it has. Somebody could just add code to the firmware that sends false data to external reads. All it has to do is report whatever data the console would expect it to have and then detection would become impossible.
People who would want to cheat on xbox live would be out of luck, since afterall, the signature checks are still in place.
http://www.xbox-scene.com/xbox1data/...FAhkcWwSgZ.php