I read today that a new version of the 360 software, known as jasper, will resolve the long lasting ring of death problem.

Dean Takahashi said
Jasper introduces a 65nm version of the graphics chip among other tweaks. With the new design, Microsoft has a chance to rise above the problems associated with the Red Ring of Death,We'll see if the systems prove reliable.

The graphics chip will likely consume less power than previous versions, allowing it to fit snugly into its motherboard socket. That should lead to fewer system failures due to the graphics chips coming loose.
The ring of death was something that put me off buying a 360 but with the problem now resolved and prices coming down every few months, I'm having less and less reason not to buy one.