It looks like the Xbox 360 has been cracked. Check out the video:

It's true that another 360 could be plugged into the back of the TV. But word on the forums is that the video's author has a good reputation and the technical chops to have pulled this off. Plus, much of the work leading up to the breakthrough occurred in a public online forum. As of right now the verdict of the usually-dubious Xbox hacking scene is that this is probably the real deal.

The exploit is a little different from those that were used on the original Xbox. Instead of the BIOS being subverted, the DVD-ROM's firmware was modified to prevent it from telling the difference between a burned and pressed disc. MS beefed up the security on the parts of the system that had been attacked on the XB1; that console's DVD firmware was cracked, but very late in the system's lifecycle. By all appearances, MS didn't see this class of attack coming.

The downside: because the rest of the system remains secure, unsigned code still can't be run. So this hack is really only useful for playing backups — aka pirated games. Cool apps like emulators and media players are still out of reach.

The other fly in the ointment: the hack hasn't been publicly released. "TheSpecialist" and the rest of the developers might legitimately not want to foster piracy — or they may just fear Microsoft. But either way, their notes are available for all the world to see. Given that, I doubt it'll be very long until we see a mass-market mod of some sort for the 360.