According to efnet/SRKTT they simple bought the chips directly from source, the encryption hasn't been broken afaik.
The board looks like it has the same chips on it as the Datel board. The MS encryption chip is obviously not present. AFAIK, it's a very small 8-pin chip. If it's a hack, it may be possible for MS to nuke it in a future update.
Also, just purchasing said chips "directly from the source" wouldn't save one from the wrath of MS's IP department. There's a reason why "licensed" controls are presented as such. But as long as you don't try to base a commercial product on one, and don't mind taking a chance that it stops working at some indeterminate future date, then it might be useful.
Then again, Sony just rendered pretty much all unauthorized 3rd party controllers non-functional as of update 3.50, so it'll be interesting to see if even that side of it works when / if it's released.
RandyT