I dont think it would effect it that much. While the gaming populous cares a lot about this, the normal consumer may never hear about this. His/her best source of knowledge is his/her friends or someone in a store. They might hear about some problems, but it's questionable how many, and how would it effect their purchase.
I think in the long run rushing the system worked for Microsoft. It allowed them to get a head start and hurt Sony early on (which is their plan). It attracted third party support and had more people buy the system early on rather then wait for a PS3. Whil many people will look at the fact that Sony is selling more then Microsoft, they have had to do it at a cost by lowering the price (were it still 600-500$ it would still be sitting on the shelves). Since Sony is in for a profit, it hurts them as they can't make up the money spent on the system. Third parties wont make as many games and people wont buy as many accessories.
In the end, Microsoft accomplished their goal. Also, they looked at tyhe PS2 and saw a good reason for it's success was it released really early on which is what Microsoft was banking on. I think gamers care about the red ring but most consumers will still buy the system.
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