I got three bad units and gave up
Fortunately, people seem to love the 360 anyway, and seem to enjoy it a lot while it works - I have yet to see somebody completely pissed off/turned around because of this.
Well, I enjoyed it a lot while it worked, but after three bad units, I gave up.
The first unit I got was manufactured in April of '06, purchased in May, and it suffered four "this disc is unreadable" errors and one hard lock-up (had to disconnect the power) in 10 hours of play. This was with three brand new Xbox 360 game discs without a scratch on them.
I returned the defective unit to MS (at their expense), and it was replaced with a refurbished unit manufactured in June of '06. It gave the "disc is unreadable" error in just over an hour of play.
I immediately set up a return, and in January of '07, MS sent me another refurbished console, manufactured in April '06. This one gave the "disc is unreadable" error almost immediately,
and the audio output made soft popping noises whenever you pushed any button on the controller.
After the third defective unit, I realized that I had spent more time on the telephone (>12 hours) with MS support agents than I actually had spent playing the console. That's when I gave up and sold the console back to the store I bought it from.
Of the three people I know (in real-life) with 360s, one has had no problems since November of this year, and he has logged scores of hours on Gears of War. Another has frequent unreadable disc errors like I had, but he's afraid to return his recently manufactured unit to MS for fear of getting a refurbished unit with an older manufacture date. The third has occasional unreadable disc errors, but he got the in-store warranty, so he's waiting until the next hardware revision before he wastes his time swapping his defective console out for unit after unit after unit . . .
I bought the Xbox 360 fully aware of the Internet reputation of its unreliability; I thought that the reputation was undeserved, overblown, the result of people not treating the console like they should treat a computer . . . Apparently, I was wrong.