Xbox 360: 3 days...Little Progress

It has now been 3 days since I submitted my on-line warranty registration for my Xbox 360 and the "ring of death" exhibited by the 3 flashing red lights around the power button.

So far, I have received an e-mail confirmation telling me that Microsoft is aware of my problem and that they are shipping me a box so I can send them my 360 at no charge.

Do you think it's a bad sign that Microsoft has placed a large "Console Repair" section on their http://www.xbox.com/ home page? If this is something they're having to place prominently on their home page, I suspect that it might take more than the estimated $1B to cover the number of repairs they must be making.

Perhaps in an effort to offset some of the negative press (and negative referrals from system owners) they're likely receiving, Microsoft has just lowered the cost of their system.

Time will tell how damaging this quality-control issue will be in the console wars now that Sony has reduced their prices and now that the Nintendo Wii is becoming increasingly available. Can Microsoft and the Xbox 360 retain the lead they built up by releasing early, or will these console repairs knock them back to the pack? I know MSFT and Bungie are counting on Halo 3 to carry the show in the fall, but nobody will be playing with Master Chief if their 360s are sitting in a repair warehouse somewhere.