The infamous Red Ring of Death. I have experienced it with my launch console, and I think most of you have either experienced it yourself or have a friend who has. Is it fair to say more people have experienced RRoD on their Xbox 360 than Halo 3? Not really, but we are talking about millions of hardware failures.
Dean Takahashi, author of the books Opening the Xbox: Inside Microsoft's Plan to Unleash an Entertainment Revolution and The Xbox 360 Uncloaked: The Real Story Behind Microsoft's Next-Generation Video Game Console, has written a very interesting post on Venture Beat about the reasons behind the infamous hardware failures that have plagued the Xbox 360 since its launch.
Takahashi considers it the final chapter of his book on the Xbox 360, and goes into great detail on what the problems were, and how Microsoft could have avoided some of them. It's the story of a company obsessed with getting to the market first and pulling off a worldwide launch, cutting corners along the way, and ending up paying a hefty price. It's a worthwhile read, whether you own a Xbox 360 or not... a lot of well known facts, but also some interesting background and anonymous behind the scenes facts. It also details the efforts made to alleviate the problems.