Hopefully it'll be transparent to the 360's OS, hijacking read/write/seek/check protection commands but throwing anything else through to the real drive to respond to (possibly with a disc in the drive just to keep it happy).
I've not looked at the videos on YouTube yet, but it sounds like at least they're peddling a project that's almost ready for release, instead of "don't buy that because we're making something better, we can't show you yet because we just made it up on the spot don't want anyone copying it, but it's on its way, honest".
As OzModChips said, they've been around on the Wii scene for a long time, and they're still here. OK, so they dragged their arses over some of the updates (especially DriveKey) but did it in the end, and their products are rock-solid (I've never had a Wiikey2 go bad, and only 2 or 3 Wiikey1's out of shitloads of them but I think those were clones anyway). If something's made to the standard of "trusted Wiikey quality" it really does mean quality from what I've seen, not flimsy switches and solder pads that break off (which I've seen elsewhere).
Fingers crossed, I hope this goes well and doesn't get stomped by MS.
This post has been edited by Exobex: May 25 2011, 10:00 AM