Xbox 360 solder is brittle
In order to avoid using lead in products used by children, Microsoft made the Xbox 360 with lead free solder. Lead free solder tends to be more brittle. To make matters worse, the wrong type of lead free solder was used by Microsoft, one that gets really brittle with heat exposure over long periods. If you stress this brittle solder, tiny hair-line cracks will develop. The cracks can obstruct the flow of electrical current and also result in a weak solder joint that easily breaks.
Flawed heat sink clamp design
The X clamp is badly designed because it's clamping force is very uneven. When the GPU and CPU heat up, this uneven pressure intensifies, causing the motherboard to flex and warp. Brittle, lead free solder joints are stressed with the flexing action of the motherboard. With time and heat, cracks and breaks occur in the solder joints.
Left over foil on the heat sink
On a number of it's units, Microsoft failed to remove some foil on the heat sink. Several "ring of death" failures can be attributed to this. The thermal compound must be reapplied if you decide to remove the foil.
Deficient Manufacturing Process: Soldering Temperature Was Too Low
The soldering process during manufacture was done at too low a temperature. When lead free solder is under heated, the resulting solder joint is full of voids and other defects. These weak joints won't hold up for long even under normal circumstances. If you include the other Xbox faults such as running too hot and warping of the motherboard, you've got the perfect formula for failure.
The Graphics Chip Puts Out Too Much Heat
Instead of going to an experienced vendor for its chip design (ASIC vendor), Microsoft designed the graphics chip in house, in other words, on it's own. They did this in order to save some tens of millions of dollars in the cost of the design.
Although Microsoft has some experience here, it doesn't come close to the level of expertise of the ASIC vendors. As a result, their graphics chip is inefficient in that it dissipates too much waste heat.
This problem dovetails in with the weak cooling system in the console.
Microsoft has gone to an ASIC vendor in the US and had the graphics chip redesigned. This move goes a long way to resolving the overheating problem.
However, there are lots of Xbox units in use that still have the old graphics chip. These will continue to be susceptible to heating problems.
Not Fit for Purpose
As the XBOX 360 is so badly designed and will fail it is not fit for purpose and so legaly one could claim back thier money under UK law.