http://www.maxconsole.com/?mode=comments&newsid=2751
My buddy installed this trainer, i have seen this first hand on his Xbox & it is entirely true.
Now the great news is, it is not a hack that creates the characters, the characters are in the game for everyone to unlock but the method to go about unlocking them is not known at the moment.
Follow the link up top to see exactly what I'm talking about but here is the list of characters they've found by hacking the game, they've made a trainer so people with modded xboxes can try it out for themselves.
1 MONSTER
2 ONAGA
3 JAX
4 Classic Raiden
5 Quan Chi
6 Kung Lao
7 Cage
8 Sonya
9 Nitara
10 Shang Tsung
11 Frost
12 Kitana
13 Drahmin