It will take a while to fix (hopefully they'll do it for free), I had to send it to Germany. At least it was the console and not my HD, would be horrible if all your save game data AND downloads were lost. It would take forever to get them back.
> Microsoft have extended the warrenty for the red ring of death
> Warrenty on the Red Ring of Death is now 5yrs.
The warranty promise means nothing, I bought mine in Dec 2007 (it was only made 2 months before that!) and it broke down last week. I went through the Xbox support site, typed in my problem (2 red lights - overheating, but every time I switched on the console within seconds it red ringed) and the next page said it was going to charge me £70. So I went back, picked the 3 red lights/E74 option (I kept my problem description the same) and was soon after given a printing label.I've sent off the faulty 360 to MS, hopefully it will come back in working order.
Warrenty on the Red Ring of Death is now 5yrs.
As Motomoto states, you can fix it yourself, u'll need a special tool to open the case, these are available from auction sites, but once used Microsoft will no longer entertain you. I all so recommend not to do this.
Contact Microsoft and they will arrange for the xbox to be collected and it should be returned to you within a couple of weeks.
I got a mate who had this problem 3 times in as many months, he told Microsoft that he wanted a refund, Microsoft said they couldn't refund him but did offered him a free upgarede to a Xbox Elite. Maybe worth bearing this in mind when contacting microsoft.
Good luck and keep safe m8.
If your Xbox is still in warranty, then I would NEVER suggest that you try and repair it yourself using a video found on Youtube. Seeing as most 360's come with a 3 year warranty this shouldn't be a problem for the majority of owners. I also think that most 360's that you send back now they replace the motherboard with a specifically designed board to prevent any similar issues occurring again.
More info about this can be found at Microsoft's Xbox Support pages
Otherwise the fix isn't too complicated and involves you replacing the main component of the cooling system, which I believe is a heatsink for the processor. Although I would not recommend this for most users, it can be simple and take only a few minutes if you have the right tools.