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Peter Moore said:

We have been following this issue closely, and with on-going testing have identified several factors that can cause a general hardware failure indicated by three flashing red lights on the console. To address this issue, and as part of our ongoing work, we have already made certain improvements to the console.



For everyone saying "they need to fix the problem," read the above.

For everyone bashing MS because of this move, yes, they should have made it reliable from the beginning.  But isn't this exactly what a company should do when they've got a reliability problem in one of their products?  Take responsibility for the problem, make it right for existing customers, and fix it for future customers.