I think it's time to try to revive the free60/libxenon legal homebrew scene [note x-s: libxenon is a library for writing programs for the Xbox 360 with XeLL, without using any existing code as a basis]
I have submitted patches to libxenon [note x-s: see here] to try to make it more usable, it's still far from perfect but you can already do some stuff with it.
As a 'proof' of that, here's a preview vid of a Nintendo 64 emulator that uses libxenon: