the software that is being refered to is supposedly "able to recieve LIVE login requests, and transfer hacked data to the xbox" , this would allow for hacked self extracting xbe's (such as dashupdate.xbe) could contain C & E replacement hacks.
The software is supposedly written by a guy in mexico, and retails for around $500 USD.
As far as any of this being true, its possible but highly unlikely.