Between me and my roommate we have gone through 13 xbox360 units since launch. 11 were victim of rrod, 2 cd tray scratches. I must say I was irritated at the continued issue but NEVER was any additional cost ever incurred to myself. I found the replacemet process smooth. And at the interest of full disclosure 4-5 of these rrod's could have been caused by the users as it is often quite warm in our network closets depending on where we are working.
edit: wanted to add that msft did document the number of times this has happened to us and did in fact follow through with tokens/apologies in the form of "sampled" products. (refurb zunes ftw)







