the main reason for the high failure rate is quite simple. ms made a couple of serious design flaws and imho, these were not a big deal with the early games, but as the newer games came out they were pushing the hardware much harder and with the higher resolutions (720p, 1080i and now i think 1080p for the new elite) becoming the norm, these design issues are showing their ugly head.
the first design issue is the gpu hs - it is extremely small in the terms of a gpu hs, has very little airflow and is made of aluminum.
the second design flaw is the attaching mechanism of both the cpu and gpu hs. they put tremendous pressure on both the heatsink, to the point of actually warping the gpu hs (i have seen warped hs on my buddies 360 that had died)
the third is not so much a flaw but being rohs compliant - at least that is what i have heard. the solder is either very low lead or no lead which makes it brittle.
so the failures come from the fact that you have solder that is brittle, a lot of heat on the gpu hs that doesn't get much air and a cpu and gpu hs retention mechanism that puts a lot of stress on the mb so the end result is that you get broken solder connections, usually around the gpu area. there are very easy ways to fix the problem but they void your warranty, so that is why people go through 3-6 consoles. if you want to fix your 360 and not continue to have these issues, you basciall do what is called the xbracket or xclamp mod - you remove the bracket that ms put underneath the m/b and connects the 2 hs and replace them with regular screws and washers to get the same level of height that the stock standoffs create, apply some as5 to the cores and you are good to go. what these mods do is relieve the stress so the m/b can actually be flat and without tension and a very high percentage of dead 360s come back to life, and work fine thereafter. ms has attempted to fix this problem by putting some epoxy around the solder joints of the gpu and i think the cpu on the new 360 elite, but that won't fix the problem. imho, the reason ms won't admit there is a problem is that then there would need to be a recall, and when you have nearly 11M consoles out there, well you can see why they don't want to admit there is a problem.
this is sad too because the 360 is actually a very good console imho. the quality of games is very good when gaming in hd along w/ 5.1 DD sound - very good.
people even go farther to get more air inside the actual console w/ holes and additional fans as there are areas around the m/b you can tap into to get 12V and 5V where needed.
sadly it is this simple. sure you will have some hardcore failures, but i am guessing what i have described here accounts for 75%+ of the issues. and for the 360 my buddy had that died, well no issues whatsoever and it has been quite a few months with more than 1 marathon 9-10hour gaming session playing games that are hard on the hardware (rb6:vegas, graw2) in either 720p or 1080i.
doing some simple mods have lowered the gpu temp (the main issues hs wise as the cpu has a decent hs - large, heatpipe and decent airflow) over 15C, and again, these are very easy mods to do.
there is no way a computer m/b or gpu manf would have ever considered the amount of tension ms design puts on the board.
the other pita is that when you get a repaired 360 none of these mods have been done because then they would be admitting a design flaw, so your 2nd, 3rd, 4th, etc 360 will more than likely fail too
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