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DirtyP2002 said:
my launch console broke, too. I had to send it in. I got it back after 4 days + 1 month Xbox Live for free. RRoD was shit but MS really tried to keep their customers satisfied

 

Of course, they knew about the RRoD issues before the 360's launch, they deceived their customers and investors about the failure rates before the 1 billion repair cost announcement to shareholders (latest figure 1.15 billion USD). All the right ingredients for mass consumer lawsuits and product recall which would have costed the company many times more money (and additional reputation loss).

More info:

Microsoft Fires RROD Whistleblower

"Takahashi, who also wrote the book "The Xbox 360 Uncloaked" and currently writes for VentureBeat.com, said there were several precursors to unacceptable hardware failure rates prior to Xbox 360's November 2005 launch.

An anonymous Microsoft engineer reportedly insisted in August 2005 that Xbox 360 manufacturers shut down their lines in order to address yields that were an "abysmal" 68 percent (i.e., 68 out of 100 machines failed).
"

Asian manufacturer (July 2007): "Microsoft have known of this problem for a long time. They are trying to blame component manufacturers but it was a combination of bad design and them (Microsoft) wanting everything cheap. This is what caused the problem along with them wanting to beat Sony to market. A lot of manufacturers were pushed to deliver components without much testing of the components working together inside the console". "

Microsoft still denies problems with regard to disc scratching as they know it would cost them a lot of money, it's a less prevalent / severe but yet genuine issue:

http://vgchartz.com/forum/thread.php?id=39303



Naughty Dog: "At Naughty Dog, we're pretty sure we should be able to see leaps between games on the PS3 that are even bigger than they were on the PS2."

PS3 vs 360 sales