Microsoft seems to be losing the war against modders attacking their precious Xbox 360 hardware with news hitting the internet that a group of modders has successfully downgraded the 360's kernel. Since our last hack / mod update, modders have been diligently working to gain access to a vulnerable kernel by flashing an eFuse without relying on the nearly impossible CPU-key hack and they're happy to announce that they've been successful. Using some sort of "timing attack" a group of modders has flashed one of the CPU's eFuses and been able to revert back to a vulnerable kernel which could possibly allow homebrew apps in the near future. The specific details are quite techie, but if you're curious you can read about the blown eFuse news over at Xbox-Scene.
But before everyone gets all worked up and runs through the streets screaming "teh haxorz are modding my Halo 3s!" you should know that any consoles with old kernels which modders revert back to will not connect to Xbox Live or let them play games online. So, in effect, any kernel downgrading would prevent the console from making its way onto Xbox Live ... that is unless they figure out a way to use a dual kernel system. Just play nice online fellow Xbox 360 modders and if you don't ruin our games then we won't tell Microsoft you opened up your console. You rub our back, we'll rub yours.