Like most ethical questions, this one is situational. If you're playing a four player game on the same screen, where everyone has basically the same advantage, I don't think it's that big a deal. I'd probably be irritated if someone was doing it to me who was better at the game and knew what they were doing, but I'd have to live with it.
But, isn't cheating (the unethical part of gaming) by definition the exploitation of some sort of unfair advantage? Thus, screencheating on a console game would not be cheating (they only difference between players is their knowledge of the game) whereas screen cheating at a LAN party where one person could see another's screen w/o reciprocation would be.
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