If this is true, I hope they still have the feature where you don't have to have the disk in the unit to play the games after you have installed them. I can see them having you to insert a disk if you are not connected to the internet. If you are connected, it allows you to play your games without them being in the drive.
MS is a software studio after all, I am sure if this is all true it was just a matter of modifying the software to allow it. I am sure that there are things in place to ensure authentication of the games, but if this is all true then it is good for those that felt it was hurting their rights.