A lot of extremely good points have been made, but there are a few things I would like to point out;
1. "attacking" Xport for breaking the GPL may seem a bit dumb when 99% of all releases are made with a illegal devkit. Who do you think Xport wanna get sued by? Makers of PCSX or M$?
2. Won't incidents like this onle cause more emulators to be closed source, and in the long run hurt the xbox-scene?
3. Someone said that the official XDK will always be better than any homemade devkit. That may be true, but as for the Dreamcast the homemade devkit is WAY better in functionality than the official one (Katana), and in speed I think they are about the same.
4. It is a fact that the xbox-scene is the least respected one among developers, simply because that (most of) the same sources that distribute the emulators and homebrew software also distribute warez as well (for example, emu's with bios images etc). I personally know of coders who shy away because they only see the problems with both distribution AND the persons/places that distributes it.
To stay a bit more on topic; "Should Xport respect the GPL?"
Definately. I think Cyrus is making some very good points, and I totally agree. If Xport doesn't release it, it can only be bad to the community. If he does, and are afraid to put it on his site, distributing it "through the regular channels" could be somewhat of a sollution.