Way back when, release groups hacked standard firmware to read past the DVD's index list. However, they chose not to release their firmware and hell, didn't even state how they did it.
Well, this news applies in the ballpark of the above.
linko
Basically, people have created software that will work similar to anyDVD. It will decrypt the original xbox drives and allow you to read and copy them as if there was no protection at all (you can use clonedvd, nero, etc...). Since the xbox 360 file system and disk format are probably very similar, you could expect a x360 clone of the same software (or just adde support).