This might actually make me want to get an Xbox360 (haven't had a console for five years now). It's the most appealing next-gen console to me and the only thing holding me back was this:
That's a pretty good deal for a piece of electronics.
Robbie Bach of Microsoft said:
For any customer who has previously paid for repair expenses related to the three flashing lights error message on the Xbox 360 console, Microsoft will retroactively reimburse them.