It looks like Xbox 360 owner might at last be free of the dreaded Three Rings of Death. The new, smaller 65nm Falcon chip has found its way into the new Halo 3 Special Edition console, along with a new heatsink (pictures below). Microsoft hasn't given an official explanation for the huge number of faulty Xboxes, but the general belief is that overheating is to blame, especially as Microsoft has already returned repaired consoles with beefier heatsinks.
If you're the owner of an olive-drab Xbox with lot number 734 from team FDOU, you're in luck. Check the Xbox forums for more details, and see what WIRED blog Game|Life has to say about it here.
The Falcon Has Landed: 65nm CPUs Appear in Xbox 360[Daily Tech]