Word from the engadget crew is that there is a critical vulnerability in the Xbox 360 that could allow for some "homebrew" code to be used on the system. According to the engadget story
, there is a "critical vulnerability in Microsoft's Xbox 360 that allows privilege escalation into hypervisor mode." Toss in a method to "inject data into non-privileged memory areas" and you've got "an attacker with physical access to an Xbox 360 to run arbitrary code such as alternative operating systems with full privileges and full hardware access."
The flaws were found in kernel 4532 and 4548, but Microsoft patched 4552 on January 9th.