Microsoft have caused quite a stir this week, banning over 600,000 Xbox Live users for having modded their consoles. The move is an attempt to deter piracy and cheating in online games, two problems that obviously and validly need addressing. But have the bans hurt users with more innocent intentions for their modifications? Read on to find out.

Piracy in the games industry is no new thing; I can remember way back to weekend car boot sales in the early 1990s where dodgy Del Boy types would be selling knocked off Amiga 500 floppies for peanuts. Sales of software for the original PlayStation were marred by piracy-enabling mod chips, and the Dreamcast too was ridiculously easy to exploit, requiring just a boot-disc to play copied games.

Widespread peer-to-peer piracy is rife too, with illegal downloads being cited as a major contributor to ever declining PC software sales.

Despite the might of Microsoft behind it, the Xbox 360 is no better defended against piracy-enabling mods. Specialist services will modify your Xbox 360 for under £100, allowing a user to download and burn their own software. Though Tech Digest does not condone piracy, it is easy to see how strong the temptation of buying cheap knock-off games or downloading them for free could be, especially with games like Modern Warfare 2 commanding an extortionate £54.99 price tag.

Though the gaming industry is becoming increasingly wealthy, piracy costs companies billions of pounds in revenue. While larger publishers may be able to bear the brunt of such losses, small independent companies literally go hungry without legitimate software sales. It results in companies less prepared to go out on a limb and innovate with new creative games, instead focussing on an established series or intellectual property. Cue boring sequels, dire-movie cash-ins and derivative Halo-clones.

Even giants like EA are looking to cut as many as 1,500 jobs in the new year, which will cause a dozen games in the development stages to be canned indefinitely.

However modding does not necessarily equate to piracy.

Here is where the argument gets interesting. Piracy is bad, no question about it. But banning a console modded to increase hard drive space, when the only official alternative is a measly 120GB drive? That can't be fair, right? Microsoft seem very keen to limit the choices available to users to just Bill Gates branded gear; just look at the recent lock-out of third party memory units.

Also, having shelled out for the inflated price of a game, shouldn't a user be allowed to back up their copy? Discs are still a fairly fragile, scratch prone medium. If something so fragile as a disc breaks, should the consumer really have to buy a brand new game? Sure, there is the increasingly available option of legal digital downloads, but, just like with digital music downloads, I think I speak for many people when I say that I like the ritual of walking into a shop, handing over my money and coming home with something physical in my hand.

Modded consoles also open up the Xbox 360 to the homebrew community, with gangs of bedroom designers the world over teaming up to try their hands at game making. This is often a well of creativity and a great entry point for designers with untapped talent. It's easy to forget that massively popular games like Counter Strike started life as software mods themselves.

But perhaps the homebrew community wouldn't seem so vital to creative design if game companies had the money saved from piracy to invest in it themselves. It's a vicious cycle.

Piracy will never go away, but how we deal with it is important not just in terms of punishing cheats and thieves, but also in how we go about protecting consumer rights and defending those who just like to innocently tinker under the bonnet of their favourite toys.

Live Macworld 2009 Keynote coverage. All times are GMT. Reverse chronological:

With thanks to Engadget, Gizmodo, Macworld, Electric Pig.

6.30pm That's it. Tony Bennett takes to the stage to play the keynote out...

6.25pm iTunes

Have sold over 6 billion songs, iTunes world's largest media library, 75m accounts.

1. Price

More flexible pricing. A $0.69 price point and a $1.29 tier also. UK tbc.

2. iTunes Plus

Apple has worked with "all the major companies". From today, 8 million songs will be DRM free right away, 10 million by end of first quarter 2009.

3. iTunes available on iPhone over 3G

Preview and purchase music anywhere using iPhone, sync on computer at home.

More over the jump: 17-inch MacBook Pro, iWork '09, iLife '09...

Astraware's GTS World Racing for the iPhone and iPod Touch should go live in the App Store over the next 24 hours or so, according to one of my industry contacts.

As the name suggests, GTS World Racing is a driving game in which you race a coupe, sports car, or Formula One car around a variety of international tracks using the built-in accelerometer to control the car.

I've been playing with a pre-release version of the game for a couple of hours, and it's a slick application with lots of potential.

Though I love the genre, I'm not a driving game fanatic, and so it's difficult for me to compare it to some of the other big names in racing. I found the cars pretty easy to control from the start, as using the accelerometer (just as in Monkey Ball Island) is intuitive.

Here we go with Steve Jobs' Keynote Speech at Apple's WWDC08 in San Francisco.

All times are BST (GMT+1/PDT+8), entries in reverse chronological order.

1950: All done.

1950: Steve concluding with talk about WWDC08. Go developers, get stuck in to the new iPhone!

More affordable iPhone

1944: More affordable: iPhone 3G 8GB will cost $199, 16GB for $299, also available in white.

Rolling out on July 11th to 22 countries, for a max of 199 all around the world (damn exchange rates)

iPhone worldwide

70 countries over next few months.

The BlackBerry 9000 was officially announced by Research In Motion this morning, and within minutes I was on the phone to my mobile contract provider, arranging the return of the Pearl 8110 I'd just ordered. Even though the 9000 won't be out until Summer, it's still worth waiting for, in my opinion.

Or is it? Do you prefer the 45g-bar-of-chocolate-size of the Pearl 8110, or the BlackBerry Maps featured in the Curve 8310? Let's take a look below the jump at the key features of the three feathers RIM has in its cap...

According to virtually every tech or gaming-orientated blog on the internet superhighway, come July the rumour is that Nintendo will be announcing the next-gen DS console at the E3 expo.

As someone who's rushed out and bought both previous incarnations of the portable gaming console, I can appreciate the huge lead made between the two, and as much as I adore the Lite, I can think of a couple improvements I'd like to see in the next version, which is rumoured to be called the 'Liter' or 'Extreme'.

The rumour mill has already started grinding, with fingers being pointed at 'larger screens', with both possibly being touch-screen, and the hardware being 'lighter and thinner'. So far, the DS fans aren't really thinking outside the box, so if you read below, you'll see my hopes for the next version...

Yesterday the second official teaser trailer for the upcoming X-Files 2 film was uploaded to YouTube (above), churning Files fans' stomachs with the possibilities for the hugely-awaited film. Snow! It has snow! What does that mean? Ooh, Scully looks gorgeous with long hair! Wow, Billy Connolly looks even more insane than normal! Amanda Peet - oh noes! Wait, was that Xzibit?!

To celebrate the film getting a release date of July 25th, I've rounded up some of the best X-Files related products and applications available on the internet. It's what Mulder would've wanted.

1.) Fanmade PC tower case on eBay - currently on $50 with no bids, the tower has six drive bays and two floppy bays, plus several carefully-chiseled see-through bits. Plus a big 'X' etched into that metallic green spraypaint, which, as the seller says, is 'great for THE X FILES Fan!'