Valve released a fix for the cheating problems for L4D today. There will be another patch in the coming days for user-hosted and system link games. Here’s the full skinny:
LEFT 4 DEAD XBOX 360 ANTI-CHEAT FIX RELEASED
Valve has released a server-side fix to deny the recently reported cheats on all
dedicated Left 4 Dead Xbox 360 servers. The fix is designed to halt the cheating
behavior on the dedicated servers, which accounts for the majority of the co-op and
Versus modes of play. A title update for those playing on user-hosted servers and/or
via system link will be released in the coming days.