I had the red ring, out of warranty, bought the x-clamp replacement from ebay. Now works fine. Couple of my mates have tried it and it's worked for them as well.
http://cgi.ebay.co.uk/XBOX-360-X-Clamp- ... 286.c0.m14
Basically it replaces the really badly designed clamps which hold the heatsinks to the processors.
Cheers
Dave