Xbox 360 DVD firmware hacked
Having spent months delving into the internals of the Xbox 360, a team of hackers at xbox360hacker.net have achieved what they call the "first Xbox 360 hack" and topped it off with a video. This shows a backup copy of PGR3 running on a 360 with modified DVD drive firmware–the firmware hack merely allows non-360 discs to be played in the 360, meaning the console will only run signed, unmodified code.
It's a small but important first step; anyone interested in homebrew code (e.g. Linux) on the 360 will have to wait for further developments. The team responsible isn't releasing the firmware to the public–if you understand the technology behind it, though, you might be able to duplicate their efforts.
Xbox 360 and hacking–the history:
Don't count on modding your Xbox 360: Microsoft exec
Xbox 360: The most hack-proof console ever?
Xbox 360 inches closer to piracy with bootable, modifiable kiosk DVD
Xbox 360 hackers cheat at Hexic, make inroads into hacking the 360
[Thanks to everyone who sent this in; also via Xbox 360 Fanboy]