Microsoft rushed to say that such a hack, the way xbox360hacker.net described it was useless' and now the hackers have agreed.
It is not that the hack didn't work. The group says that the video was real. The problem is that you need a hardware degree from the University of Hackology to pull it off.
The mod requires you to remove the flash chip from the drive circuit board, inserting a special flash programming device, which could just as easily destroy your Xbox.
It is a bit like a scientific discovery, to be patted on the back by those in your community others have to be able to replicate your results. xbox360hacker.net claimed to be the first to hack the Xbox 360, which was sort of true, but for it to be any use to the known world, their mates have to be able to do it too.
More here. µ