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Well that's pretty cool; however I had always imagined that the Xbox360 would be much easier to do this to since it's much smaller. Also the power supply is external - if they were to try making it internal, they'd find themselves pretty tight for space.

If I were to do it, I'd try to make it work without that huge external power brick (either put it inside, or get another smaller PSU that would fit better), and/or with battery power (it'll probably run out after a short while, but I think it would be worthwhile - you can switch location without losing your game).

It would take a lot of work, but it would be sweet.