My findings :
You can delete all folders except /en-en/, /images/ and /items/, hex kioskmain.xzp to change "Play demo" to "Play game", also within kioskmain, searching through hex the secnd png is actually the xbox 360 logo shown when the software boots (fun!).
Reguardless of what media its burned to it will boot, cd-r, dvd-r etc, it doesn't matter.
In /en-en/gamedb.ini one can setup and configure the paths and parameters for the demo games, additionally you can set certain flags, such as consoletype, demo path etc.
QUOTE
; ConsoleTypeFlags possible values:
; 0=Xbox 360
; 1=Xbox 1
; 2=Xbox 1 and 360 (though backward compatibility)
In setting up my own game entry and transfering the files from a retail (and compatible game), for xbox 1 to the disk, with the paramter set to consoletypeflags=2, the menu still boots however when you attemp to launch the disk, you are given the error "Cannot play this game", if you attempt the same, with a game that is not yet compatible, you receive an 'incompatible' error.
Additionally, attempting to launch retail games from either the demo dir or the base dir of the dvd-r, (via changing the demopath= value to game:\gamename.xex), results in the xbox throwing out a "Check disk region and clean the disk then try again" style error.
the menu's contents can be completely changed via /en-en/kiosk.ini and /en-en/gamedb.ini providing you have the patience, personally i deleted the entires for all the games, and all the other content, deleted their images and added one item under game, with my own files and this worked fine.
Hexic is infact a flash game, with wma audio, the flash player (xex) would seem to map the xbox controller buttons to common inputs like A, as even mouse rollover still works.
Any attempt to replace the flash with flash files of different width/height and missing a certain segment of code, fails and the xbox freeses while trying to load.