It's fairly well documented these days but there was a very fun game of cat-and-mouse between the satellite companies (DirecTV and Dish Network) and all the pirates. For DirecTV, at least, the outline of the whole thing went like this
Subscriber specific smart cards were insertted into the DirecTV set top boxes and they were, IIRC, essentially responsible for providing the decryption keys for the video stream. The cards did this using a custom onboard ASIC that I don't think was ever really reverse engineered. So the cards - at least for the "mainstream" DirecTV pirates - were always required.
People would manufacture and buy modified smart card readers which would tweak the power to the cards in such a way that after enough attempts they would enter some kind of debug mode and accept unsigned software updates.
People would disassemble the software on the card and write patches (all in assembly) to make the smart cards to authorize any request for channel access instead of them cross referencing the authorizations for your account (1).
You'd apply the update to your card using a modified reader and voila - all channels worked perfect.
But then, DirecTV got clever and instead of just using the ASIC to compute the channel decryption keys they started to use both the ASIC and a hash of parts of the card's onboard software! So now every week or so a update was released which would break the old patches since the new update would potentially need the hash of parts of the original code that the software had overwritten.
So then the people writing the patches would do things like add lookup tables for the known incarnations of the packets that initiated the decryption key generation...so they'd just have a table of Hash(DecryptionPacket) -> Hash(OriginalSoftware). But then new packets (usually released each week on Monday's I think) would require more updates.
There were more clever patches that would do more sophisticated things but the extent of which I don't really remember.
Note that this was all _after_ the infamous Black Sunday event when lots of cards were permanently disabled. That was the P2 generation of cards. The generation I'm referring to above (during my exposure to the scene) was almost entirely P3. They were running P2, P3 and P4 cards all at the same time, I think.
As far as I know this scene is entirely gone now. I don't think the P4 cards were ever exploited - not publicly, at least.
Lastly there were LOADs of forums for this kind of thing. vBulletin forums were all over the place. Lots of thriving communities.
My memory is pretty hazy on all this now and I was pretty young at the time so if anyone has more salient details on this I'd really like to hear them!
(1) - I don't remember exactly how the massive subscriber database was sent down in the stream in such a way that the boxes and cards could do this. Maybe some kind of tree? Maybe someone else can fill in that detail.