I own a 360, but I got it refurbished (guess it had the RRoD), and i've been gaming on it for a minimum of 5 hours a day for 5 months and it has been fine. I have it in a wide open area, with lots of space, and dust freverently. If it went I probably wouldn't mind waiting a couple weeks for the problem to be fixed, or would buy a new arcade and swap out my HD.
In any event I don't know ONE person who owns an Elite that has RRoD and all the peeps I know with Elites had them since day 1. I generally thought they were manufactured better but I guess not.
If I were you though, I might just wait until June to get a new retail one (if you can hold out that long). MS is releasing new mother boards during that cycle that are supposed to be better with the heat and QUIETER. But if you can't wait 3 months or so, just take the plunge and get a new one with the extended warranty. Worst comes to worst, your's will break after June, to which point they will fix it and put the new motherboard in it anyway.
And I'm totally in agreement with you about games. 360 has by far the best library now, followed by Nintendo. But I believe Nintendo does "variety" a little bit better. Whereas 360 has a lot of games that fall in the same vein, but are still good.
I'm expecting the RRoD eventually, but keeping my fingers crossed
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