I've seen the RROD in countless stores. For a while, it was more common to see the RROD in display cases than an actual, working Xbox 360.
I've only seen one in a non-store Xbox 360 when a friend brought his over to play at my house. The rest that I know of I have been told of by friends who have had to ship their 360s back, or I've read about on the SA forums in their big "my xbox 360 broked" thread, where they keep all kinds of good information like how long their Xbox lasted, how many they've had to send back and how long those lasted, the results of their case with Microsoft (how long it took, did they get a different refurb or their own repaired, etc), and some of the time they follow up with an extra post saying that their refurb broke.
It's a large community, but there have been hundreds of logged RRODs there. There are several per page for a 92+ page thread. It seems that there's a 15-20% chance of refurbs that are sent back my Microsoft failing within the 90-day warranty extension right now. And as far as anyone can tell, the rate of RRODs for Falcon units is high, as a lot of the reported RRODs in that thread have been Falcon units. However, the other units are older and older units are more likely to die or to have died already than newer units (simply because of age).
The RROD is very real, and very nasty. The MS employee who estimated it at 30% was most likely being very, very generous to MS. You don't set aside more than a billion dollars to repair something less than an epidemic.
All of my friends who have 360s, except for one, have had to ship theirs back more than once.
