For all those who dont know and to help those who know a little get some more info please check http://www.libtiff.org/. Brief summary in regards to the hack and "no no dont release they will patch it" comments, libtiff is a widely used library from Linux to Windows. Anytime the library is utilzed to excute code that was not directly sactioned by the user the devlopers of libtiff work dilegentaly to patch it. Not as a way to thwart PSP homebrewers, but to keep it safe from countless security risk on those other OS's I mentioned before. I doubt this was found by any PSP devloper or (I could be wrong dont flame me if I am) but more likely by a libtiff debuger and the PSP Scene went to work seeing the possiblity of allowing code to run through this hole.
Depending on the extent of the hole we could have anything from what we have seen thus far, to full kernel mode. But, even if the hole does allow for full kernel access, we would have to figure out 2.8 firmware syscalls wich would require either decryption or tedious trial and error.
*NOTE: Im not claiming all the technical stuff to be true on the PSP side, please correct where neccessary. This is more an explation of what libtiff is, and a brief and general one at that.