So I decided to do some math.
The cost to manufacture a 360 is $323.30 as of Q4 2006. (http://www.gamesindustry.biz/content_page.php?aid=21256)
For the sake of argument let’s say it costs them $250 to repair a unit. That seems pretty high to me but let’s just noodle with that number. So $1 billion will cover the repairs on 4 million XBox 360s. They’ve sold almost 14 million total units so far.
The initially extended the warranty from 90 days to 1 year. C|Net reported that in December 2006 (From News.com: Microsoft extends Xbox 360 warranty to 1 year). This past July (2007) they extended it again to 3 years, and offered compensation to all those who’d paid for repairs due to RRoD before then. Reuters reported this on July 5th (From Reuters.com: Microsoft plans over $1 bln charge for Xbox repairs)
They’ve never released numbers, but initially claimed a 3-5% failure rate. They eventually stopped using that number since they’d have to back it up. The Reuters article says “Microsoft Corp. (MSFT.O: Quote, Profile, Research) said on Thursday said it would take a more than $1 billion charge to fix “an unacceptable number of repairs” to its Xbox 360 video game consoles…” and “Microsoft is under pressure with mounting complaints about Xbox 360 failures on the Internet…” and “Bach said many of those factors took time to show up in the consoles, explaining why the number of repairs had grown in the second year of the Xbox 360’s release. He would not say exactly how many Xbox 360s had been returned due to hardware issues except that “the number is too large.”“
I’m sure Dave will still refute the problem, and maybe he can elaborate on his theory that we never really landed on the moon (‘Where’s the proof!?’) and that it was all a Hollywood stunt.
My only argument here is against him saying “the red light issue on the 360 has really only affected a small amount of the overall population of 360 owners.” I’m not knocking the 360, I have one and love it. I’m not knocking Microsoft: they owned up to the problem (something Dave himself refuses to do) and have taken steps to fix it. I just want potential buyers to know that at some point there’s a good chance you’ll have to go through a 3-4 week period without your XBox while it gets fixed.
In fact, if I’d suggest ponying up for the newer Elite model, since its possible the problem is rectified in it; the system is too new to tell for sure.

I listed sources already.  Want more?
From PCWorld.com: Estimates Say Xbox 360 Failure Rate as High as 33% and
From DailyTech.com: Retailers rate xbox 360 failure rate as high as 33 percent
Microsoft has consistently refused to release numbers (what do they have to hide?), so all we have to go by is reports from retailers on return rates.
You can’t produce numbers that say the problem doesn’t exist. Your statements are as much hearsay as mine. More so, as you cannot cite any sources at all. If the problem didn’t exist, some retailer somewhere would’ve countered all the news articles about the issue in order to sell more systems? No one has come forward and denied the problem exists, not even Microsoft.
“So as you see, I simply dislike seeing facts misrepresented no matter which side of the fence you sit on, especially for the purpose of elevating another product.”  No, as you stated elsewhere, you just like to argue.

Peter,

What I asked you was simple. You state it’s true that the 360 failure rate affects a large segment of the install base. If this is true, you should be able to share a source that verifies this “fact”. If you cannot provide that, you’re not stating truth, you’re representing hearsay as truth.

Ancedotal information acknowledges that the problem exists, but it does not prove it affects a large portion of the install base. Actual numbers do. I haven’t seen a news article yet that gives solid numbers showing a 30% failure rate. If you have, I’d love to see it.

Lastly, I personally don’t need to make a case for the 360. As you posted earlier, MS has put aside 1 billion to provide 3 year warranty coverage of possible RRoD malfunctions. That kind of action shows MS stands by their product, they don’t need me to defend it.

The PS3 has had reported failures as well but this is rarely mentioned when discussing the two consoles.I didn’t bring it up because I don’t believe the reported PS3 failures affect a large portion of its install base, so for a majority of PS3 owners there won’t be a problem.

So as you see, I simply dislike seeing facts misrepresented no matter which side of the fence you sit on, especially for the purpose of elevating another product.

Let each stand or fall on their own merits.

Dave, now you’re just being ridiculous. So news articles about retailers reporting 30% failure rates, personal experience, Microsoft stating that they were going to spend $1 billion dollars on repairs, and widespread anecdotal information isn’t “proof?” Do you expect me to go door to door to everyone who owns a 360 and ask them if theirs has ever had a problem? I mean seriously, what would you accept as proof? 
Really, y’know, refusing to accept the truth about a thing doesn’t make it untrue.
I could turn the question right back onto you and ask for you to show me PROOF that the failure rate isn’t high.
Anyway, you’re just baiting me at this point and I think anyone reading these comments will see the situation for what it really is.
If you really wanted to make a case for the 360, you should be pointing out the fact that MS *is* in fact doing what it can to rectify the situation, and as I myself stated, once your 360 breaks and gets repaired, it’ll be a solid stable machine. And for most people, the repair is free (though you’ll be without your 360 for 3-4 weeks). I wasn’t so lucky, but I’m not claiming that most people get hit for that $100 (well, $94 actually) charge.

Bob,

Considering many potential PS3 buyers likely already own PS2’s I think being able to play those games on the PS3 will be a factor.

After all, there’s nothing like the nostalgic of going back to play old favorites.

I still play Final Fantasy VII no matter how blocky it looks.