If you get the RROD (red ring of death) it is a hardware failure. If you send it away, there is no guarantee it's fixed for good. Most of the time, they don't even send your same xbox back. They send a different one that they already fixed. Then they fix up the system you sent, and will ship it to somebody else who sends in a broken one. I've had 3 different xbox's (different serial numbers on the back).
In the newer xbox's, RROD is not as common as far as I know...that being said, you still get a 3 year warranty on RROD from the date of purchase, so you should be set.
Even with the RROD problem, the xbox 360 is by far this generations far superior console. I love mine, despite getting RROD multiple times. Having to wait a couple weeks to get it back sucks if you have to send it in, but the console is just a ton of fun.
I got mine on launch day in 2005, and it took 1 year before I got RROD, and those were the worst ones.
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