hey karl, i bought a 360 in early february and it crapped out just last month (right after they announced the 3 year warranty). i'm looking at a 3 to 6 week turn around. yikes!
i usually played around 5-10 hours a week (quite a bit, now that i look back at it!) with no problems. then, right before i moved to Concord, i decided to take a break from packing to play some gears of war and the thing just froze when i started an online match.
i restarted the system and things seemed fine...i played for about an hour and then turned off the 360. turned it on the next day and "voila!"-- 3 red lights.