OK lets get something straigth.
The .xex on the disk ARE signed! BUT the media flag which determines the types of media the files can be executed from is not set to DVD-ROM only (probably not set to anything). So while the files are signed, they can be executed from any type of media (possibly even hard disk?).
Now if anyone asks why we cant flip the media flag on other .xex files and make em run off a DVD-RW, the problem is that if we try to do so, the signature check on those files will fail and they will NOT be ran by the console.
And before people get all haywire or anything abou this, it is NOT such a great development for the hacking scene. Sure we can run the demo disk of a DVD-RW and we MIGHT be able to put our own WMV-HD videos on the disk and watch em on the console, but that is as far as we will be able to go.
So NO we wont be putting an iso in our console and BAM the console is hacked.