based on xbox-scene...gist of it....mainly:
1. flash the dvd-rom with modified firmware...
2. raw game dumps, implemented with new security code, create game iso..
3. burn game iso with also modified dvd burner firmware for some dvd burners...
4. mass produce dvd games...

if not mistaken, the person that cracked this can go on LIVE...
the reason is, most region lock games have the same security code on the game disc, that's why he managed to go on LIVE...
thats before the mass update from M$ for x360....
now, not sure if its safe to go on LIVE with hacked firmware...

ppl hype about M$ LIVE, prolly after this M$ will require all x360 owner to update their firmware via LIVE...then, no more backup play...hahaha....

go legit, buy original.....as x360 is more worth it to play original and affordable....