An original XBox reportedly burnt down someone's house.
Regarding the story I think the fire occured in 2004 (probably an insurance scam) and the guy claims it was caused by an XBox 360.

I got the link to work. Yeah, it really wasn't a very well written article. Not enough details.

The article sounds highly suspicious and since there is a direct lie about the power cord i will go with it being BS.

Im not surprised.

The guy probably had some stuff kept around his power cord like a curtain.
That almost happend to me once. I kept my bag on the power cord, and it was ready to flame.

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

If it's true, the guy is an idiot.

Great
PS3 help finds cures
Wii aids in therapy
Xbox burns things

P.S. Im not bashing im just stating on what i see (i heard an xbox smoldering at a walmart)