[quote name='CheapyD']They already have. Sundance from MLGPRO dropped this knowledge on me at E3.
Microsoft has taken a billion dollar charge to extend warranties (read: fix 360s)
Let's just guess that it costs Microsoft $100 to fix each broken 360. I think that is a fair estimate since it would include shipping (both ways), parts, and labor.
Keeping the math simple:
10 Million Xbox 360s x $100 Repair = 1 Billion Dollars
Microsoft must anticipating that every 360 has a red-ring inducing defect.[/QUOTE]
That's all premised on the idea that repairing/replacing each and every 360 will cost $100. That is, frankly, rather silly - particularly because we're not sure what the inherent flaw of the system is. It could involve replacing the motherboard, it could involve adding heatsinks; many of us seem to think that the 65nm chip will be some sort of wonderful panacea for this console's woes (even though that's complete speculation).
Who knows if it would cost them $1 or $400 per system to fix the flaw? That's what interests me.
EDIT: [quote name='seanr1221']In response to Cheapy saying that it probably cost about 100.00 to fix each 360: Newsweek stated that same amount in their article about this.[/QUOTE]

well, then.
Now, of course, those poor folks who have 360 problems outside their warranty (fried USB ports, discs scratched to hell) are out of luck - MS still won't acknowledge any problems with the DVD drive.
I'm no advocate of cheating the system, but frankly, if my 360 (#2, FWIW) dies on me, I don't care if it's on fire or shitting blood. I'm calling MS and telling them I've got RROD. They're going to have to replace it. I figure that, if I cheat them a little to fix the system they sold me (by circumventing any payment I would have to make on the repairs) is merely my move in this game of chess they started when they knowingly shipped so many defective systems. Quid pro quo, as far as I'm concerned. It'll be like the end of the movie "Dirty Rotten Scoundrels," but with less Michael Caine.
Hell, as soon as there is ample evidence that the 360's rolling off the factory lines have a new internal design and are far more reliable, I might take my healthy ol' 360 and call MS, telling them it's got the Red Rings. If I have a system that has such a high probability of dying on me, and a suitable alternative exists, you bet your ass I'm going to get the more reliable one, considering that it is free, even if a little chicanery is needed on my part. As many a wise toddler has said, "they started it!"