"Reports from a game console enthusiast site, apparently verified by independent members of its forum just before Christmas, state that Microsoft distributed to retailers who display Xbox 360 consoles in their store kiosks, a self-booting playable demo disc without incorporating the company's usual security protection. As a result, .ISO binary images of the disc can be made, redistributed, burned to CD-R media, and played from those replicated discs.

While such an inadvertent release poses no immediate threat to Xbox 360 commercial products, since none were included with the kiosk demo, the existence of a non-secure disc whose binary image can be run from ordinary media, could expedite the efforts of individuals seeking to discover the secrets of Xbox 360's file system.

A copy of the .ISO image from the kiosk demo disc was immediately distributed via a Usenet newsgroup, by "Team PI Coder" - the same Dutch group responsible for extracting .ISO images from commercial discs, and distributing those images over the newsgroup over the holidays. Although the copied commercial images, when burned to CD-R, cannot be played on an Xbox 360 console, their contents can be examined on an ordinary Windows computer.

An information file accompanying the kiosk demo image contains this rather non-cryptic message: "It seems Microsoft was in such a hurry to get this stuff out that they forgot to set the media protection on this disc. This leaves hackers with the possibility [sic] to hack around with this disc that load from a normal DVDR5 backup!... We hope this encourages all hackers, coders and crackers out there to take up the challenge. Enjoy!" The message contradicts statements by defenders of the practice who say the team is merely practicing its rights to tinker with its own equipment.

Within a day of the Team PI kiosk disc posting, other members of the Usenet newsgroup posted what they claim to be code fragments that make copied CD-R discs self-booting from the Xbox 360 console, though subsequent posts indicate those fragments to be non-functional." [link]