My 360 initialy had problems in November 2006, I could not play Chromehounds for any reliable length of time. It would lock up, sometimes while starting the game, sometimes after playing for an hour.
Microsoft deemed it a bad unit, and said they're replace it, I was under the new 1 year warranty (had a 01/2005 console).
Life got busy, got promoted at work, and didn't have time to go and pay for a box and shipping to get it back to MS (no coffins were being sent at the time) for my free repair. Why should I, it works for everything else, and Chromehounds is only mildly amusing.
6 months pass, I am playing Geometry Wars before heading to work, the 360 freezes, 3 red lights.
I call, now that I am well out of warranty and expect to be paying out the nose for the replacement costs. I explain the situation, and hoped that possibly since they had deemed it a bad unit 6 months ago that it would instead be appreciated that I had extended the life of my bad unit another 6 months.
Because I had determined I had a bad unit within my original warranty, the service techs (actually a lead taking tier 1 calls due to high volume that day) took care of me, transferred me to a lead (who was acting as lead, not taking calls) to arrange for a free out of warranty replacement.
It was actually reasonably nice talking to these guys, like they were just friends I was calling to talk to about my console.
Box was sent to me on 6/5, it arrived while I was away on business (on my first trip to NY!). I sent the console in on 6/12, and it is now arriving back to me today, 6/28 with a 90 day warranty that I will promptly call and extend when appropriate.