A few months ago I bought a 360 from a friend of mine and have had no problems with it what so ever (neither had he).
A week or so ago it froze a couple of times, then on Thursday it started pixilating on buildings, the sky etc (I think the lense may have been scratched by not picking the disc up properly).
I registered the console and phoned them the next day, I said it was a gift and didn't know exactly when I got it. They went away and checked the serial number against there records, the first owner must have registered it (launch system)!
Basically it was out of warranty, but have said if I send it back they will replace it with a new one!! (I hope it is not a recon - although if the problem is fixed I'm not overly worried).
They sent me a UPS returns label via emai and is being collected tomorrow.
Apart from the fact it has broken down, I am impressed with the service so far.
I've posted this (not to gloat) so that if anyone reading has an out of warranty system, don't be duped into paying for a repair, be persistant and all should come good.