So, will MS also include a fix for the
DVD firmware hack? Maybe, MS was warned about this hack
several months ago, so it's not like they didn't have time to come up with something.
How they will check it is unknown, but they currently have many ways to do so, both checks on the discs (backups are still very different from retail xbox 360 discs, even when patched with SS) and of course checks on the memory and firmware of the DVD drive.
Of course as long as the hardware doesn't change the DVD firmware stays 'open' and there can be no real trusted communication between the DVD and the console core... so theoretically people could always modify the firmware to come with a reply the console expects, but MS could make this very very hard and confusing.
What MS will do when they detect it? ... again unknown but I guess you can at least expect a ban of your console ID on LIVE if you're online (like with the Xbox1).
They might also block the console from booting if they detect a modified firmware and/or make some easy checks on discs before booting them.
Is that legal? You own the product don't you... I understand the ability to ban you for impeading the Xbox Live "service" but can they legally stop your 360 from booting. That sounds like me going to my friends house and hitting it with a hammer and causing it to break... that would be destruction of property, how would what MS *may* do be legal?