[GeronL]

if the buyer knows.. is there a crime here?

[antiRepublicrat]

if the buyer knows.. is there a crime here?

The Digital Millennium Copyright Act (DMCA) makes reverse-engineering and bypassing security measures illegal, even on your own box. It's the same law that makes backing up a DVD illegal. There are a couple allowances in the law, such as for compatibility and research, but they are largely ignored by the deep-pocket companies who will go after you if you decide to tinker.

[John Robertson]

"if the buyer knows.. is there a crime here?"

uh, yeah. and now he's a criminal, too.

[Nonesuch]

This was hashed out pretty well on Slashdot.

Reading the article, the key factor is that they weren't just charging for the "mod chip", but also for pirated copies of dozens of games:

They charged from $225 to more than $500 for the modifications, depending on the extent of the modifications and the number of games preloaded onto the hard drive, according to a statement from prosecutors and the complaint affidavit obtained by Reuters.

During the investigation, undercover agents with U.S. Immigration and Customs Enforcement paid $265 to have a modification chip, a hard drive and 77 pirated games installed on an Xbox, according to the criminal complaint.

So this isn't the pure "mod chip test case" that people are looking for, but rather your everyday bulk video game piracy bust.

[SShultz460]

The DMA act (signed by x42) makes this a crime