My fat 60gb died last year. I replaced it with a slim after numerous semi-successful repairs. I'm considering getting it reballed. Maybe turn it into a modding project. Watercooling would be an interesting experiment.
Heat is the number one enemy of electronics. The Xbox 360 and PS3 both suffer from the same problem. In other words, what causes the RRoD is the same thing that causes the YLoD. Tin is a less than ideal metal to use for soldering high heat components. It melts at a lower temperature than lead does, and gets brittle with repeated heatups and cool downs.
Both the Xbox and PS3 use PowerPC processors. Apple actually watercooled their PPC G5 systems because the chips were notoriously hot. The G4 Cube also had cooling issues. Most PCs run cool because they have big cases with lots of air volume and airflow. Compact systems use lower voltage "mobile" variants. Lower voltage systems produce less heat and consume less power, but usually aren't as powerful. Compact systems typically aren't used for demanding tasks either.
Both the Xbox and PS3 use high voltage processors. Early 360s died because their cooling system were inadequate.The PS3 has the added problem of an internal power supply, which gets quite hot. To negate that, Sony put a giant fan in the fat systems. It merely prolongs the inevitable though. A few hot, humid summer days, dusty rooms, and enclosed entertainment cabinets will put it in an early grave.
To fix this, you shrink down. Transistors that is. Smaller transistors are more efficient, and produce less heat. The original PS3s used a 90nm process, while the slim is 45nm. This meant a huge reduction in electricity consumption, and an equally noticeable reduction in heat.
That's the long way of saying the Slims are considerably less prone to failure.