The Inquirer reports the Xbox 360 console has been cracked, but it's not really easy:
The new patches are not for the technical novice, they involve flashing your drive, sector extraction and manually backing up your legit games. There is also the more than zero chance you will brick your 360, not a pleasant thought for anyone. I would put this patch down to a technically interesting tool for the deeply geeky. Skiddies, this is not your PHD tool, buy your games like you should.