[tmp3123]

how about this: before A can lend a digital copy to B, A must turn on his internet connection and tell MS's server that he is now lending to B.

B can now download A's game to play.

A cannot play his physical copy until B returns the copy back to the server (some state must be kept in A's console to remember this).

if B's connection goes down for more than some period (could less or more than 24hr, configurable by A), his copy is automatically relinquished.

does this solve the "only single active copy" issue?