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Last month we discussed reports that Xbox 360 consoles were experiencing an increased amount of "E74" errors. Now, Microsoft has announced that they're extending the three-year warranty originally designated for "general hardware failures" (read: Red Ring of Death) to include E74 repairs as well.
It's funny because the first ever picture that came out of my Xbox 360 was in fact this error message!
What had happened was that the boxed 360 I got from the store was in fact a returned broken one, that I only noticed when I got home. I went back and exchanged it for a new one which is the one I still have (repaired once, but returned to me).