My older son got one for christmas 05, since then he has had the "red ring of death" twice. The most recent being in the beginning of December. Microsoft was very good taking care of the problem, both times I called 1-800-4MY-XBOX and they recorded the serial number and send me a prepaid box to ship to them. Turnaround was 7-10 business days. The second time same thing, only difference was that his mother wanted to ensure that he had it back before christmas and sent it next day air on her coin. Only suggestion would be to be sure all warranty paper work and registrations are taken care of. I also highly suggest purchasing the intercooler. I purchased those for both of my son's 360's and noticed they run cooler to the touch than before they had them. Picked the intercoolers up at Target for $24.99 in the 360 section. Other than that no real issues. As far as the "red ring" failures my older son had with his....who knows. Only real factors I could attribute to possible failure were heat and him constantly transporting it between his mother's house and mine, and his friends houses. He has also made several trips to AZ and NJ with the 360.
On a side note, the 1 year warranty started over with the delivery of the replacement unit. So the second time it was sent out, Microsoft picked up the tab again.
Walter
Co-owner