"Your disc is currently unreadable" is this a very bad sign?

[NightstrikerX]

I've had this happen to my xbox 360, the answer for me was simple. My xbox 360 simply wasn't getting enough power. Apparently having it plugged into a extension cord or a splitter results in this. I plugged it directly into the wall and it worked fine ever since I gave it free to my brother and bought a elite. Still works as far as I am aware.