Xbox 360s are manufactured and tested by Flextronics at their plant in Guad Mexico, known as Flex-Guad.
It is not the fault of Flex that these units fail, it is the poor design that went into them and Flex doesn't care because they are only paid to build it.

Flex runs many different products through their assembly lines for Cisco, Nintendo, Motorola, Avaya, etc and from TFA, other competitors to Microsoft don't suffer failures.

Xboxs are flawed in so many ways:
1) Restricted airflow over heatsinks using air dams
2) Awful heatsink design and little or no thermal paste between Asic and sink
3) The Asic they use are exposed die with no heat spreader
4) Microsoft tried to design their own GPU and processor themselves and failed miserably and hired a 3rd party to correct it
5) Use of lead free solder on their BGAs (very brittle and prone to low yields)

It is no surprise that many units fail due to excessive playing because the 2 main chips heat up to the point of warping the circuit board itself because it is very thin (cost cutting measure).
Microsoft placed the two hottest chips near the center of the board and it warps due to heat.  The solder balls crack when the board warps and you get those lovely E74 failures.  Turn it off, let it cool and it works for a bit until it warps again.

That x-clamp strategy used on the heatsinks was wrong to begin with.  The newer generation Xboxs use solid bolts instead of these locking pins.  If you have ever opened an Xbox you will notice those very LARGE capacitors littering the board which are prone to failure with the heat.  I have myself repaired Xboxes and can tell you those caps do not survive the removal process for CPU and GPU.

If you are a PCB designer and get a chance to see the XBox circuit board, you can see that Microsoft really didn't build a proper board.  They hired a team of monkeys to cobble together the Xbox and tried to fix thier mistakes 3 board revisions later.  Nintendo however, built a really nice board for low cost using proper design practices.

My sister dropped her laptop in the winter and cracked the LCD quite nicely. I found a "broken" laptop on eBay (similar model) for about $50. Once I received it, I simple disconnected the LCD assembly from the dead unit and connected it to hers. Problem solved!

There are always ways around this.
If they were to use a drop in brick power supply it would be 5/6 compliant.
The PCB itself would be 6/6 but still contain 5/6 items.
This is also the case when using interposers where you would solder the 6/6 asic to the interposer and solder the interposer to the PCB using 5/6 solder.

Europe would have accepted 5/6 compliancy anyways.

Actually when I used preview the spaces and line breaks were there as was the formatting. I would not have posted that information otherwise without the structure that was there. Once it was posted, it became one giant paragraph.

Microsoft really made a mess with the XBox 360 for a number of reasons: - Poor hardware designers - Poor mechanical designers - Poor choice of hardware / component placement - Lack of experience in designing ASICs - and a lot of others. If you have a hardware or PCB design background you would understand. Here are the reasons: 1. Having said that, if you crack open an XBox the first thing you notice is these huge bulk caps of 4700uF each (about 10+ of them) across their power planes. Is there so much noise in that unit you need that many huge caps? Apparently so! 2. If you remove the heatsinks, you find both ASICs have an exposed die. There is almost little or no thermal paste between the die and heatink. What they are missing is a heat spreader/lid which should be glued to the processor/gpu but no, that would have cost them an extra dollar or so. Since both ASICs have thermal diodes inside them once a critical temperature is reached, the unit stops working with a thermal alarm --> possible E74 3. Poor choice of heatsink mechanicals. They hired a bunch of monkeys to spec out their mechanicals. The X-clamp was the worst choice ever since is caused boards to warp, ASICS to lose connectivity due to cracking BGA solder balls when the temperature went up. 4. Poor feedback from their contract manufacturure who built and assembled the PCB and hardware. The people working on the assembly lines at the CM in Mexico don't provide feedback enough to the designers. If they noticed a lot of units were failing with thermal alarms or poor soldering (poor yields for that matter) they should have told the hardware engineers. Eventually, someone on the hardware team clued in and the heatsinks were changed and the x-clamps vanished and were bolted down instead. 5. Use of lead free solder. Why they chose to use a lead-free solder process is beyond me. The thickness of the PCB is already thin and they have to use extremely high heat to solder the ASICs down to the circuit board. Coupled with the terrible heatsink design/implementation you get a thermal differential on the circuit board causing it to flex. When the XBox is on and it heats up thats what you get, the circuit board warps and some of the solder balls crack because the lead free solder is brittle especially at high temperatures. 6. Microsoft learned first hand they stank at ASIC design. The tried to design the processor and gpu inhouse and learned very quickly they were terrible at it. After a horrible first run, they decided to hand that over to a design shop who knew what they were doing. However, they still need to learn how to package ASICs properly. The most common issue is with heat, and you all have read the RROD fix using the towel. Which is a poor mans attempt to solder an ASIC that has 1200 solder balls. In short, you restrict the XBoxs airflow while it is on, allow it to heatup in an attempt to get the solder to go into re-flow while the temperature of the circuit board climbs beyond 150 degrees while everything is running. Mind you the components inside aren't even rated to operate reliably at those temperatures. So even if that fix works for you, you have just cut the life time of your unit in half or less because you caused damage to all the components inside by allowing them to operate well beyond their rated maximums. So if your unit operates when its been off for a long time and dies shortly after being turned on, congrats you have soldering problems on the key ASICs. Take it back to the store and tell them its a manufacturing defect because it is! Microsoft sends it back to the CM and they strip it down and run it through the machine that solders the ASICs down using hot air or a confined infra-red source nozzle.