For some reason I get this strange feeling that the Arcade XBOX 360's are refurbished RRoD 360's that have been sent back to Microsoft. I know it sounds weird but I have an intuition for things and this is one fo them.
It may be a shot in the dark but all things considered (for instance the timing of when Microsoft saw sales revenue for the first time, shortly after a price cut announcement) what would Microsoft do with all those broken systems? Surely not take them to the dump. Bill Gates is known to be protective over the enviornment, right?