The Xbox 360 has been in the news lately thanks to the mass banning of (depending on reports) up to a million modded consoles from Xbox Live. The consoles were prevented from accessing Xbox Live because users had modded the DVD drive firmware in order to allow the system to play pirated copies of software. Although attractive to those who prefer to steal their software rather than pay for it, the Xbox 360 DVD mod was technically unimpressive as it didn’t actually bypass the core of the Xbox 360 security system. Until this morning, no one had.

A few hours ago a programmer who goes by the name Ikari released a software package called “freeBOOT v0.0.2.” This software package allows the end user to “reboot” a standard, retail Xbox 360 into a hacked version of the current Microsoft Dashboard. Once running the hacked dashboard all of the standard security checks are disabled, including the prohibition on unsigned code. In short, this means that custom programs can now be run on a modded Xbox 360. The freeBOOT software also includes the ability to use any standard SATA hard drive on the system.

With the previous DVD mod, only copies of existing games could be played. No homebrew software could be run.

At the moment installing freeBOOT is a complicated process which requires adding a second flash storage device to the system in order to store the hacked dashboard, so it is not for the faint of heart. Any console modified with freeBOOT will also be prohibited from Xbox Live. This is not a way to “unban” your console.

What freeBOOT does do is open up the possibility of homebrew development on the Xbox 360. Although Microsoft does officially support limited homebrew development with the XNA Creator’s Club the Xbox 360 has yet to see the kind of robust homebrew development scene that flourished on the original Xbox.

A video showing freeBOOT running on a retail Xbox 360 was posted to YouTube this morning.