the RROD issue is not as bad as you think. i got my 360 at launch (3 years ago) and only got 1 RROD. and microsoft quickly repaired my 360 and returned it to me for free. and the failure rate for old 360s is about 25%. now with the new jasper chip set, the failure rate is even lower.
It varies from person to person, really. Personally I got RROD three times and I've had my 360 since 2007. Almost everyone on my friend list has had it at least once. I hear it's improving, but it's still an issue.
Failure rate on 360 is still bs.. yeah the RROD is down but the DVD drives still fail and they still get E74. If you buy one expect to send it in at least once.
It's a heat issue, and I don't think they've corrected the core design issue itself. However, the newer chipsets run with less heat b/c they are manufactured on a 45nm process instead of the old 90nm for the original 360's released in 2006. Because the new ones produce less heat, they're less likely to trigger the design flaw.
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