Further Xbox hacks have shown what the machine is really capable of, as hackers reveal a prototype DivX player for Microsoft's games console.

Only weeks after Xbox mod chips hit the streets, allowing developers to run home-brew code on the device, reports of a working movie player have appeared on the internet.

Written by one of the underground developers on Xboxhacker.net, the prototype DivX player is known to work fine on a machine fitted with the Xtender mod chip.

Although the player is not yet finished, it shows that the Xbox is perfectly capable of playing back DivX movies.

A demonstration movie of the player in action is currently doing the rounds and the rumour mill claims that full-feature DivX players will be out very soon.

Last week, a MIT student cracked Microsoft's security systems on the Xbox, allowing him to write custom software that would run on the machine without the need for modification chips.

He plans to find a legal loophole allowing him to release instructions for the creation of custom code.

Along with movie players, MP3 players and web browsers are potential applications that could turn the Xbox into something more than a games console.

But it remains to be seen whether Microsoft and its partners can get such products onto the market before the hackers.