I had a 2nd gen Xbox, I believe (before they got skinny) and I can tell you that heat was a problem. Of course, technical issues aren't a big deal if a company will stand behind it. But when mine failed, Microsoft wanted $120 to fix it, plus to keep my Xbox for 12 weeks while they fixed.
Of course, that's 12 weeks during which I'm still paying for Xbox live, which is completely absurd.
Like I said, I love the system. Their customer service is horrendous.
Not only did I not pay the $120, but I also charged back all of the games I had purchased and not finished, plus the balance of my XBL membership. In total it was greater than the $120 they wanted to fix it.
Well i had the opposite experience, not sure how they wanted to charge you for it as it is well documented that MS covers the RLOD issue. I went though Five 360's and did not pay an extra cent.