If you don't mind messing with the insides of your box there is a way.

You solder some wires on one of the cards, and it allows you to mod your Xbox. Now I have heard that they have been shutting down these "modified" xbox's lately since they found out what people were doing, but for a while there was some hacks running around.

http://www.xbox360-hacks.com/

They also found a way to get free xbox live if I am not mistaken, and people were getting all sorts of other free stuff on these "modded" xbox's. Tho Microsoft will not allow anything to harm their sales for long, so whatever the method it will always be short lived.

It was 2007 when they ran the first batch of unassigned code I believe, Microsoft was using a 320+ bit encryption code or something insane like that, so it was virtually impossible to crack. They ended up exploiting an un-patched piece of the code, since cracking the encryption would take decades.

http://en.wikipedia.org/wiki/Homebrew_%28video_games%29
(Scroll down to 7th gen Xbox360 section)
According to this it seems they patched this method in 2008, but I know there is other methods out there, just extremely underground, and hard to find. Microsoft has done a pretty good job at making their console virtually un exploitable, so if you want to play with hacks I would advise getting a PS3 since they are quite a bit easier from what I understand.