i think that the dashboard now checks DVDs more thoroughly when booting them... they won't have totally blocked out DVDs being bootable because people can download updates for their xbox and burn them to disc, if they took out that feature it'd mean a lot of irritated people... i haven't got a updated box to check on, so i can't backup any of my points, but i doubt they'd just ditch that feature. its also far easier and cheaper for magazines offering demos to burn the discs themselves, than getting them burnt and pressed by MS. more demos = more awareness of games = more profits... so they wouldn't want to get that number lowered.
what i personally think they check for now is the little video that you get when you put your xbox 360 game in a normal DVD drive. when we burn the kiosk disc, we just burnt the files, not that video. it'd be relatively easy for MS to check for that video, and since all demos and games have to have that video, a check like that would mean you could weed out the backups from reals. obviously when we can boot byte to byte backups this protection will be useless, but until then its another obstacle they've set out for us. i don't think this check was to prevent the kiosk disc necessarily, but the backups we've managed to rip.