Apparently GeoHot has found and published the root key used by the Playstation 3 to sign and verify games. Not just the public key used for verification, mind you, which is the easy part. They've published the private key used to sign the game executables. With the private key, you can sign your own executables and they'll be accepted by the PS3 without needing any hacks, kludges or bug exploits. This is a big deal because the key's pretty firmly embedded in the hardware itself. A simple new firmware update can't change it. And if new hardware doesn't accept the old key, then all existing games simply won't play on the new hardware.
Frankly I don't see why the console makers are so bent on keeping anything but their approved software from running on the consoles. It makes no sense. Someone who wants to run, say, Linux on the PS3 still has to buy the full-blown PS3 console, there's no way around paying Sony for that. They may not buy any games if all they're interested in is running Linux, but then if they couldn't run Linux they wouldn't be buying those games either, nor would they be buying the PS3. They might use this ability to cheat at single-player games, but what's that hurt? They're still buying the PS3 and still buying the games, and there's nobody else to be affected by their cheating. Multi-player games... hacked games might be an issue, except that those games already have lots of ways of detecting cheating on the server side where it's safe from user intervention. For instance, to prevent target hacks simply don't send the client information about objects it can't see. Not even the best hack can target what doesn't exist.
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