] A group of Xbox security researchers say they have found
] a way to run Linux on the Xbox game console without a
] so-called mod chip and will go public with the technique
] if Microsoft won't talk to them about releasing an
] official Linux boot loader.

] Muir says the release of the claimed series of exploits,
] one of which is in the Xbox Dashboard utility, factory-
] installed on the Xbox hard drive, could be disastrous for
] games companies intent on preventing piracy. If genuine,
] the exploits would let anyone with even a slight technical
] knowledge "reflash" the Xbox BIOS, allowing users to
] pirate games. The only hardware modification necessary is
] a dollop of solder on the write-enable pads on the
] motherboard.

Very interesting..

This is a nightmare situation for Microsoft. If they do nothing, exploits will be released enabling mass-piracy of their games. If they release a Linux bootloader, then they have allowed Linux onto their platform. They sell these consoles at below cost and make their money on games. Razors and blades. From an economic standpoint, either presented option is totally unacceptable.

Also, if Microsoft plays along, there is no guarantee that the exploits will not get released, or more likely, discovered by others.. Infact, I believe they are only being baited, and these exploits will be released anyway. I can't envision Microsoft giving into any demands, of any type, let alone a signed linux bootloader for the XBox..

Expect Microsoft to create a third option. Expect lawsuits. Expect someone to get arrested. The DMCA will play an obvious role. I could see them attacking Huang just for drill.. This will be a developing story..

Group claims Linux advance on Xbox | CNET News.com