The majority of Xbox 360 owners I know have sent their Xbox off for repair at some point over the past three years. Almost every time I turn mine on I'm waiting for the dreaded red rings of death to appear.
Dean Takahashi from Venture Beat has written an in depth article into the problems behind the 360 failure rate and what Microsoft (and its competitors) have learn't from it.
If your a 360 owner or had problems with your console then its well worth a read.
If my 360 failed and I couldn't get it repaired, I would most likely by a PS3 or Wii.