OK, i am looking forward to this thing, but the price is too high for me. I'll wait for it to come down.
However. There seem to be 2 issues on here, and i thought i'd put my take on them.
"Does this thing break the 360 security then?"
I would say no. Look at the manual. You have to connect a wired controller to it to get it to talk to the xbox 360. This means that the security chip is only needed for the initial handshake procedure, and the xfps thing just passes the message through from the controller's security chip. Somehow, they seem to have been able to then store this code, or stop a "disconnect" message from getting through for when you remove the wired controller (to use a usb mouse and a usb keyboard).
"No headset support"
It seems to me that there is headset support, but not on the actual unit. On the wired controller that you plug into the unit for the security thing. The only issue would be if you used a usb mouse, usb keyboard and still wanted to use a headset, as there would not be enough usb ports.
Both of these answers are kinda educated guesses, but they make sense to me. I would love to be proved wrong by the makers of the xfps, but they don't seem to post much here. Or for someone on the boards to tell me that i cannot be right (giving some good reasons).
Anyway, yeah, just my 2p. Take it or leave it.