The XDK Debug BIOS, is an alternate BIOS

BIOS

In IBM PC compatible computers, the basic input/output system , also known as the System BIOS or ROM BIOS , is a de facto standard defining a firmware interface....

 created by Microsoft

Microsoft

Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...

 for Xbox

Xbox

The Xbox is a sixth-generation video game console manufactured by Microsoft. It was released on November 15, 2001 in North America, February 22, 2002 in Japan, and March 14, 2002 in Australia and Europe and is the predecessor to the Xbox 360. It was Microsoft's first foray into the gaming console...

 gaming system. It is included in Debug Xbox

Xbox

The Xbox is a sixth-generation video game console manufactured by Microsoft. It was released on November 15, 2001 in North America, February 22, 2002 in Japan, and March 14, 2002 in Australia and Europe and is the predecessor to the Xbox 360. It was Microsoft's first foray into the gaming console...

 consoles that are used by game software developers. It differs from a Retail BIOS

BIOS

In IBM PC compatible computers, the basic input/output system , also known as the System BIOS or ROM BIOS , is a de facto standard defining a firmware interface....

 by allowing the Microsoft

Microsoft

Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...

 XDK

Xbox Development Kit

The Xbox Development Kit is a software development kit created by Microsoft used to write software for the Xbox gaming system. The XDK includes libraries, a compiler, and various tools used to create software for the Xbox. The XDK has the option to integrate itself into Microsoft Visual Studio...

 to link with the Xbox while it is executing code and receive feedback. It also allows for the running of code not digitally signed by Microsoft

Microsoft

Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...

, similar to a hacked Retail BIOS

BIOS

In IBM PC compatible computers, the basic input/output system , also known as the System BIOS or ROM BIOS , is a de facto standard defining a firmware interface....

, since finalized code must be submitted to Microsoft

Microsoft

Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...

for a key to run on unmodified Retail consoles.

The debug and retail BIOSes do not differ much, and as a result hackers have been able to create hacked debug BIOSes which can be run on any retail Xbox. Thus, any Xbox can be converted into a Development Xbox. By further studying the debug BIOS, hackers have gained the ability to modify any Xbox BIOS in a way which allows them to load it from the internal hard disk, and then boot it 'on the fly'.
This hack has been of great significance to the Xbox community.