http://www.xbox.com/en-US/support/systemsetup/xbox360/resources/warrantyupdate.htm

After recently changing the XBox 360 warranty from 90 days to 1 year,  the XBox team has decided to take it to the next level!  Your warranty now covers:

Free Shipping:
Microsoft will pay for shipping.  Both ways.

New Post-Service Warranty:
If Microsoft repairs your Xbox 360 after the warranty period has expired, while you will be responsible for the repair costs, your repaired console will be returned to you with a new, one year repair warranty. 

Return of Original Console
In either an in warranty or out of warranty situation, most customers will now receive their original console back from Microsoft. 

Faster Service
Microsoft is implementing an expedited repair process; upon receipt of the console, Microsoft will repair it and ship it to you within five business days.

Combine this with new XBox 360 Elite, and you could have yourself one smoking system!