I finally got to see Topo's presentation this week-end at PH-Neutral and discuss it with him and FX.
Given that the slides aren't online yet [1], that Core hasn't published Topo's technical paper on their website [2] yet either, and that I'm done replying to direct inquiries about it [3], here's a summary of the IOS rootkit saga and its impact on the Service Provider community (from my point of view :)
Topo spent a lot of time (and if you ever loaded an IOS image in IDA you know what I'm talking about) analyzing strings and functions in IOS. In his proof of concept he located the code doing the password check and adds a trampoline to his backdoor code (by saving paramaters, glueing the two codes together, doing the "new" password check and returning properly to the main code path). Nice lesson on 101 hooking on IOS.