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I think they got the story from KHTV which is a legitimate new source but the original article does mix up the Xbox and Xbox 360, at least for the power cord. I'm assuming though that the actual device was a Xbox 360.  Also these are extremely rare occurances, the two other cases mentioned were for the original Xbox.

People should remember though that this can happen with other types of electronics as well, especially when instructions for their use is ignored.  For example here's a story of a laptop overheating on a charger and causing $500,000 in damage:

http://www.stonningtonleader.com.au/article/2008/03/25/31858_mpv_news.html