I had the dreaded 3rod (3 red lights of death). I sent it back to microsoft the first time and they sent me a refurbished unit back - this is how they handle their warranty. As soon as my warranty was up, yep, you guessed it, 3rod again.
Pros: they know how to fix xbox360's - that's for sure!
Cons: at first I thought the price to repair it was a little steep but when they showed me what they did to it - it was worth it:)
more