It is sad how many people look at this as a bad thing. "End of the scene this", "end of homebrew that".
I've been around all of this for long enough to know that this kind of stuff wont destroy the "scene". What we have right now is a limited number of people doing something that a few hypocritical people dont like. Its ok to mod your xbox using a hardware solution, but a software solution is the root of all that is evil. I am sorry, but this is so incredibly stupid.
Some people think that this will cause a huge influx of 13-year old pirate kids who got an xbox for Christmas. Of course it will. But this is no different from any other console available right now. I'll admit, that yes, when I was younger, I pirated software. But not many 14-15 year olds have jobs to pay 50-60 bucks a game. I'd like to say times have changed since then, but they haven't. Just join a console piracy channel on IRC somewhere... you'll find that a good percentage of the people there are young.... Somehow they have modified consoles, someone had to do it for them. I have modded enough systems to know that the xbox is BY FAR the easiest console mod I have ever done... anyone with a steady hand can do it.
Now, that whole last paragraph was a bunch of nothing, but there is a point coming. The Playstation2 piracy scene (in my opinion anyway), is much greater than the xbox piracy scene. Raise your hand if you've ever done a 22-wire PS2 mod. These kids have modded consoles, these same kids could get a modded xbox console. Somehow this hasn't destroyed the "scene", and yet all of you people are catastrophizing something that isn't already available.
Sure, it could cause some problems with Live, but how many people in the homebrew scene spend any time on Live. Personally, I dont even do homebrew. I bought an xbox, and then I bought a modchip. I could pirate stuff all day long if I wanted, but I dont. My xbox is my "media box". I play around with it, I even play a few SNES roms from time to time. But I still havent found any good reason for me to spend that much money for the Live kit, plus the monthly fee, plus my ISP bill. Its a waste of money.
Mandatory updates, thats just a waste of my time talking about this. Sure you could force the user to update their dashboard or whatever. How many people have modded xboxes and still use the MS dash. You can modify BIOSes to run any dashboard, with any name (come on, random letters work here), and run it from three different places. People complaining about a possible mandatory update havent quite thought that through yet.
Anyway, sitting around crying about something that wont happen is a waste of everyones time. Bitch and moan all you want, but it wont happen. The whole downside here is this: all "scenes" have some piracy involved. There is always a group of people (big or small) that just plain don't want to pay for games. It is a simple fact of life. The PSX had it, the PS2 has it, and you better believe the xbox has it... whether anyone likes it or not.
This "exploit" doesnt change a thing. Anyway, flame away.