Originally posted here by i2c
Linux was ported to the Xbox, as you can imagine this wasnt digitally signed and a mod chip wasnt needed.

It exploited a buffer overflow in a game, this allowed linux to be booted on the Xbox, Microsoft saw this got annoyed and patched it using the Xbox Live system. Apparently in the Xbox contract/ warrenty (not sure sorry) that your supposed to sign and send off your signing away your write to modify it and allowing MS to patch your Xbox using Xbox live. it was something like that but please correct me if im wrong.

Theres a whole website related to xbox linux, it details what ive just tried to explain better i imagine.

As for the virus, im theres more exploits out there, so if you looked for them you could explit them i suppose....dont see the point personnally.

i2c
The save game exploit basically lets you flash the onboard tsop to a bios that allows you to run unsigned code. Installing a modchip allows the xbox to function perfectly normal when the chip is uninstalled or turned off. If you flash the TSOP with a save game exploit, you would have to flash the tsop back to the original bios before you could use xbox live.