ATTN: The 360 does NOT RROD unless you do stupid things to it. One of my friends has had two 360s (his father plays one) and just recently, one of them got RROD'd. However, it was kept in a confined space, overheated, and apparently threw off the laser reader in the CD. Also, I'd just like to point out that the PS2 and other consoles had issues with their CD readers, but it wasn't as publicized as the 360's issues were. Another one of my friends likes to abuse his video game systems (the PS2 he sold me he had dropped on the video outputs) and his 360 held up for quite a while. Apparently, it RROD'd the other day, but he sent it into Microsoft and got it back a couple weeks later.
Despite all that, the 360 is a great console, I own one, and it's a lot of fun. The warranty makes it even better, just in case something does happen. I would suggest taking a look at cooling methods though to reduce the risk of overheating and possibly screwing up system internals. Also, if you do have the RROD, try wrapping a towel around your Xbox for 10 minutes or so, unplugging it, and then turning it on again. I've heard that this works, no idea how though.