I got my XBox roughly 5/06 and it went dead roughly 12/06. I had read about the problems though and went ahead and paid extra for an additional warranty on the unit [back in 5/06].
I ended up taking the unit back the same day that Microsoft's first warranty extention hit so it didn't kill the extra warranty on the unit.
NOTE: Because of the high failure rate the store had changed its policy of doing an in-store swap and would only do the RMA for you. After whining like a little girl for an hour or so I eventually walked out with a nice shiny XBox though
Also Note: Even with the silly-high failure rate the XBox 360 has more games that I'd actually want to play so at this point I'm not particularly regretting my decision.