Both my older sons have XBOX360's. We purchased them at Best Buy with the two yr replacement plans. How they work is if the xbox fails (which it will) under the manufacturers warr, they will simply swap it out and you dont have to use the warrentee. If it fails after the manufacturers warrentee, they will swap it out once. My youngest has swapped his out 3 times in the last (first) year since he bought it. My other son has had his 4 months and is starting to have issues.
I have a wii, in the front room and it has never failed.
If you buy an XBOX360 buy it from Best Buy and pay the $69 for their 2 yr plan. Either that or expect to have to ship it off to Microsoft for repairs numerous times and be without it for months. The manufacturer warrentee is now 3 yrs, so with the extended coverage you can swap it out, in store, as many times as you need to for free. Then after 3 yrs you get a single swap out for the $69. Well worth in IMO.
Both my sons also watch Netflix movies via their xboxes.. Pretty cool. However it is limited to the "view instantly" collection which is only some mighty old movies. None of the new stuff can be watched this way.
They grew out of Halo3 very fast and are now playing Call of Duty 4 and 5.
COD 5 is also available for wii, which I am getting soon.. With the wii, you can play it with a "gun", which is better for me. I have a hard time remembering all the buttons on the xbox
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