Yeah, I don't know where he got "Hacked Characters" from.
People were permabanned from XBL for using pirated versions of Borderlands and Forza Motorsport 3 on a modified console.
So far, there are no real "Hacks" for 360 other than an easy item duplication trick.
What a player has to do is go to an area away from a New-U station (Which saves your game), have a friend stay in-game while you drop everything you want to duplicate and exit the game. Go back into the game, and have your friend invite you to the same room, go back to where you dropped whatever gear you dropped, and lo and behold, it's still there, and simultaneously still in your inventory, meaning you now have two of everything you dropped.
And people were saying the 360 version wouldn't have exploitable hacks and glitches XD
lol cool trick!
probably not gonna be around by the time i actually buy a 360 version tho(decided to buy the PC one only 'for now')