Last month we first learned about the first proven hack that will allow the PlayStation 3 to play games that are backed up to the hard disk drive. This was called the PSJailbreak and it was real.
It was so real, in fact, that Sony blocked the sale of the chips in Australia, where the first e-tailer was readying them up for pre-orders.
Sony won't be able to stop the eventual release of this exploit, however, as the code from the USB device is out in the wild and is now called the PSGroove. The PSGroove is an open source piece of software, which means that nobody owns it and nobody is selling the code. This also means that Sony has nobody to sue.
Of course, the open source code current does NOT allow the playback of backup games, which keeps it all very legal right now for the homebrew community. You can bet it's only a matter of time, though, that someone uses this homebrew hack for less than legal purposes.