Yes its possible. Download a trial arcade game off of Xbox Live. Take it to a Jtag run a Homebrew App called XM360 to unlock full game. And there you go.
XBOX LIve Arcade games are only stored on the hard drive. They are digitally signed to the console when you download them. The procedure described by Stuart allows you to remove the restriction of the digital signature. I believe you need a custom dashboard in order to run any unsigned games / programs/ ec.
By the way, I'm not sure where Stuart's suggestion falls in terms of piracy but I'm sure it's not condoned in this forum.
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