Even if games are open source, that doesn't mean the builds of it are legal. Most (if not all) homebrew games are build with XDK.
Maybe I'm forgetting something, but the only legal XBE's out there are:
-reboot/power off
-linux loading stuff
-(phoenix) bios loader / nkpatcher
-some cxbx demo's (?)
-one or two emulators
If you want to code a legal dash yourself you could take a look at the OpenXDK. <