What intrigues me the most is:
if they can update the modchips via a GC executable (I don't know if the lines they're using to program the chips are the sames used to inject the code to the firmware) wouldn't it be possible to inject the modchip firmware codes directly without the GC?
(oops, now that I said it out loud, I realize you would need a mod to run the GC homebrew code in the first place.
But, would that be feasible? If the firmware stays intact when "soft-booting" back into Wii mode, that would theoretically work.
Then, we would just need an exploit to run GC homebrew code without a physical mod chip.
But it definitely opens up the possibility for an "original" GC boot loader that would patch the DVD firmware, doesn't it? Could that be what the recently announced Wii ActionReplay is all about?