Here is a little more direct answer about the matter.
http://forums.xbox-scene.com/index.p...c=288735&st=15
Basically, it find out how big the XBE is, what it was designed for, and what the XBE looks like.
Quote:
It takes this information and encrypts it with the MS private key.
The Xbox takes it and decrypts it with the public key.
(RSA works by letting you encrypt with one special key, and then it can only be decrypted with the other special key. The public and private keys.)
If the information on how big the XBE is, what it was designed for, and what the file looks like is right it'll run. If not, error 21.
So simply swapping the sign code won't work.
To make it work you would need the private key, probably under heavy guard at the MS offices.
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Each game must be signed by a 2048bit key. That is very large. Most things are only 128. MS's xbox key is a "raoaring pimp" compared to others. Anyways, developers send the final cut of the game to MS, and then have it signed. The developers don't even know the key. Basically, it is ms's way of saying "if you make a game, i want to approve it, then you must pay a royalty in order to have it ran on my xbox". It is the dual layered print that kills us.
This is as simple as I can put it. The xbox can only decrypt the key. Basically, the xbox can see if something can be run on the xbox, but not why it can be ran on the xbox. It is like a wall with someone talking behind it. You can hear everything they say, but you cannot see the person that is talking. You see, hacked pc firmware won't copy the key, because it can only decrypts it and cannot encrypt it (you need to know how it encrpts in order to generate the key on the disk). Modchips remove the check. You don't need a master key to do that.
learn more:
http://www.xbox-linux.org/docs/projectboverview.html