A few corrections: The XBE Header is signed with RSA, the xbe data is signed with SHA-1. SHA-1 has supposedly been cracked.
The problem is, the media flags (what the xbe can be booted from, i.e. HDD, CD, CD-R, CD-RW, DVD, DVD-r, DVD-RW, Gamedisc) is all held in the header, which has not been hacked and therefore CANNOT be changed.
What would be needed is an xbe that can boot from HDD natively (one of the xbox dash xbe's or possibly the Halo 2 update xbe as it's held on the HDD) and/or one that could boot from CD-RW (Which we will probably never find) This basically makes the ability to run game backups without modification impossible! However, using current methods, we could get a bios loader / kernel patcher installed as xboxdash.xbe and totally lose the font hacks. This would do you no good for Live games, as the kernel would be changed once a bios is loaded, and would result in a ban.
I would now like to say that this is a BAD thing. Our lovely xbox-scene website is paid for by advertising from different modchips and resellers. If anyone could mod their xbox without a modchip and have considerably no dangers or repurcussions, then no one would buy modchips, therefore cutting the funding for X-S, along with all of the sites that X-S has so graciously given a home!
I would now like to say that this is a GOOD thing. but not in the way everyone has been looking at it. Using kernel patcher and the EEE, one could still use Live with almost no signature! The only file that would be changed is settings_adoc.xip in the xboxdashdata.xxxxxxxxxxxx folder! If you prefer a bios loader, you'd have to modify it to load the bios out of a gamesave folder. This would be significantly better than the current method of having xboxdash.xbe and the fonts all changed. But it would be only a matter of time before MS started doing a hash check on that file or something of that nature. No matter what, the best way to use Live is with a modchip and absolutely NO files on C or E.
Again, this is BAD for xbox-scene, but good for the general exploitability and knowledge of the xbox.
EDIT: I repeat. THIS WILL NOT HELP YOU PLAY BACKUPS OR HACKED GAMES ON LIVE! In fact, some games can already be played hacked on xbox live! Halo 2 for example, or counterstrike. It's all a matter of thinking outside the box. (Or in this case, inside the x-box) However, the consequences are losing your xbox-live account WITHOUT a refund.