I found some more articles relating this hack - the CNET.com article in particular (linked below) is a nice read.

Taken from the CNET.com article
Microsoft said the incident posed no threat to its customers or partners. "We completely support pursuits worthy of both Ph.D. candidacy and academic publication," the company said in a statement. "And while reverse engineering of game consoles is not a new phenomenon, neither is the fact that we will vigorously prosecute to the fullest extent of the law anyone who tries to modify their system for the purpose of violating our partners' intellectual property or that of Microsoft's."
Hehe, so, basicly he's saying he's proud that it took a PhD candidate to crack the system

New, related links (since I can't edit the first post anymore...time restriction and all):
CNET.com article
Security.nl article and forum (in Dutch)