Nintendo has released System Menu 4.0, which includes a batch of IOS updates. Updating is not recommended at this point!

Quote:
The announcement lists these changes:

* Virtual Console/WiiWare titles can be launched directly from a SD card.
* SDHC support, up to 32GB
* ...

The update includes a batch of IOS updates issued a few hours before the System Menu update.
According to Wiibrew, the update is confirmed to kill The Homebrew Channel (new install AND already installed), DVDx, and likely the Twilight hack as well. Some users are reporting that HBC still boots from the new "SD Channel" added by the firmware but some apps will not launch from it. We strongly recommend not updating until more information is available.

Update #7: Save files that have copy protection, that were copied to the SD card through any previously patched system menus, will NOT copy back.

UPDATE #6: More clarification and comments from Marcan.

Quote:
Originally Posted by Marcan

IOS16 is an illegal download in and of itself and therefore will not be discussed here.

We have never supported screwing around with channels, mods, or any changes to the Wii NAND that are not strictly necessary, nor have we ever thought they were a good idea. If you want to do any of that you’re on your own.

We will not disclose the old exploit at this time as it would still serve all the pirates on 3.4 who currently need to use IOS16 (which disqualifies them from such discussion on semi-sane forums, since IOS16 is itself illegal).

We do not and will not support downgrading of any sort unless it is strictly necessary to use homebrew at all. It’s intrusive, dangerous, and so far not necessary.

SDHC has been possible on homebrew for a long time, so the new features don’t really help homebrew in any way.

The new “launch from SD” feature is just an automated copy. Copying homebrew from SD has never worked and will not work if you’ve never had it installed. It used to work on 3.2 and earlier as a backup mechanism (having the channel previously installed), but that’s not longer the case. There’s no reason to have more than one homebrew channel anyway (a launcher), and not much space to save by putting it on SD. Even if homebrew directly from SD would be doable, it’d be as intrusive as installing it, because it actually does get installed on NAND to run. So we aren’t going to go that route either.

What we are going to do is work on BootMii and make sure it works on all firmware versions to date - as boot2 on all Wiis with boot1v1, and as a channel on all Wiis period, regardless of the installed firmware version. That is all we need for homebrew, and that is as powerful as homebrew is ever going to get (full control over the console). There’s no need to waste time on other things.
UPDATE #5: WAD Manager is not affected so long as cIOS was installed before the update.

UPDATE #4: Marcan has commented at the HackMii blog...

Quote:
Originally Posted by Marcan
I’ll keep this brief.

* Nintendo, as expected, half-assed the SD feature by just automating the copy to NAND. No surprise there.
* IOS16 is gone, thank goodness.
* HBC survives. So does DVDX.
* They fixed the bug that the HBC installer and DVDX 3.4 installer use; time to bring out another one.
* Twilight Hack no longer works. I’d like to remind everyone that this exploit has been in use for over a year. Whether it comes back or a new game exploit takes its place, I think we can say it’s served us all well.
* No new problems expected with BootMii, other than needing a new exploit as mentioned previously.
UPDATE #3: Previous installs of the Homebrew Channel can be run from SD card, as stated above, but cannot be transferred back to the Wii's system memory. Installed WAD files also cannot be moved back to system memory.

UPDATE #2: Previous installed of The Homebrew Channel and DVDx seem to be fine after updating. You may or may not be able to install some new apps after updating to 4.0, though, so it is recommended to hold off until it is investigated further.

UPDATE #1: It has been CONFIRMED that the Twilight hack can no longer be copied from SD card. If you do not have already have it installed, you will not be able to run it after updating to 4.0 It may also be impossible to install other apps after the update so, again, DO NOT UPDATE UNTIL MORE INFORMATION IS AVAILABLE.