Enthusiastic Xbox developers have released a firmware that allows all kinds of modded games and software to run on the Xbox 360.
The firmware allows you to play any original Xbox and Xbox 360 games, as well as backup ones. To modify your 360, you need to break it open and hook up the SATA cable from the DVD drive to your PC, then run some command line, er, commands to copy over the new firmware.
The creators of the patch suggest that this will open up a new world in homebrew gaming on the 360.
The firmware readme also includes details of how to back up your own 360 discs. Because, obviously, the only reason to be able to run backed up discs is to protect your originals. Which you own
The programmers, posting on Xboxhacker.net, say that you use a modded Xbox on Xbox Live 'at your own risk'.
Do you feel brave enough to void your warranty and mod up your 360? Tell us over in the forums.