News.com is running a story today that a group of security researchers have discovered a way to make Xboxes run Linux without a modchip, and are apparently threatening Microsoft that unless the company releases an official Linux boot loader, they will publicize the technique.

They claim that an official boot loader from Microsoft could
be made in such a way as to disallow piracy, but that a side effect of their method, pirate copies of games could also be made without modchips.

Microsoft released a statement that they are investigated the technical and legal issues and will respond early next week.

Apparently, the hack consists of soldering a few points on the write enable pads of the Xbox's motherboard, allowing the BIOS to be reflashed.