Exploring The 360's Crashing and Heat
GameDailyBiz has a piece up looking into the crashing and overheating problems that have plagued the Xbox 360 since the system launched. A new crashing problem seems to be associated with the most recent update to the Xbox Live software, while german forum-goers think they may have identified the overheating issue. From the article: "The way it's installed now by MS the GPU chip makes contact with the protection foil instead of the heat transfer pad. This can of course cause cooling issues for the graphics chip as for optimal cooling performance there should just be a thin layer of thermal pad between the GPU chip and heatsink."
This is the same mistake Microsoft made. They, like you, assume that the 360 is a computer, and people will treat it as such. But the reality is that a game console is not supposed to be a computer. It's a piece of AV hardware, and it ought to work like it, since that's how people are going to treat it. Think of it like a VCR, it needs to be able to go in the cabinet under the TV and still work.