Next year's launch of Microsoft's network gaming service for Xbox has been pre-empted by an open source/Linux development, Xbox Gateway. Bill is no doubt absolutely ecstatic about this, but he can console himself with the thought that at least all the work XboxGW has put into the system is on the outside - the box itself remains unsullied by viral GPL-related stuff.
XboxGW expands the functionality of Xbox system link games, working rather like an Ethernet bridge, and according to the developers both bridging Xbox game traffic and splitting it up so it goes between the right players. If two people with broadband links use it, then they can play one another across the internet. Microsoft itself proposes to offer this facility, but not until next summer.
The system currently runs on Linux servers, but it's not absolutely necessary for users to install Linux (this would kind of reduce the potential market for it), because users of other OSes can just download a boot disk. Obviously you need a PC, and equally obviously you need the teensiest bit of networking to join the Xbox, the PC and the broadband connection together.
Limitations at the moment include it not supporting PC Card network adapters or USB broadband connections. The developers are working on implementations for Win32, PPC Linux, Mac OSX and BSD, and say they intend to release the source code when they deem it fully stable. Now, who's going to be the first to get one of these to run on an Xbox? ®