
Well, maybe not everybody's fun. That actually all sounds like a good time. But it's still not exactly the sort of thing I'd want to encounter without warning. The Ars Technica article about it makes it sound pretty awful--witches and tanks in the safe house!?!?! Is there no GOD!!?!!?
Here's a video of the various things people are able to do. Setting it up yourself involves modifying the contents of your Xbox 360's hard drive. It looks like you're effectively hex-editing some of the Left 4 Dead files to gain control. This sounds like the sort of thing that'll get patched out pretty quick-like, maybe with a round of bans to the users caught modifying their gear, if only to give Microsoft another chance to say "what part of zero tolerance don't you understand?"
If I were Valve, I'd just incorporate this stuff into a separate game mode and let people hack it up all they want on private online servers. Seriously, it looks like fun, and console players so rarely get to mess around with stuff like this.