Yesterday our X-Box 360 suffered the red ring of death syndrome, it was less than 12 months old too! Luckily I had the receipt and packaging so it got taken back to the store.........and changed (eventually)
A word to the wise, especially if you live in the UK.
Microsoft are not now instantly replacing X-Boxes even if they are still under warranty. If you get an error message and red lights on your console you must go to the x-box website.....
http://www.xbox.com/en-GB/search.aspx?p=1&c=10&keyword=red lights (type in - RED LIGHTS)
(this site is for UK but you can change it to international - top left)
You are advised to try all the solutions before calling Microsoft themselves to obtain a reference code, only once you have a reference code will the stores exchange the faulty items.
And they are wise to people who have had them chipped, it's the first thing they check!
Here are the phone numbers in the UK to call for a reference number - you will need your console serial number handy, this is a 12 digit number.
020 7365 9792
or 0800 587 1102
Hearing Impaired (TTY device):
0800 587 1103
Hours of operation:
Monday-Friday: 09:00-22:00
Saturday: 09:00-20:00
Sunday: 09:00-17:00