So that didn't work. My noble attempt to finish Bioshock one more time before the sequel have been crushed. I was making very good progress, finished Apollo Square and about to move on to the final area, stopping only for lunch. Silly me, food is never the answer, I should have forgo sustenance and pushed onward, but alas I returned from my sinful meal only to me faced with the evil Red Ring of Death, taunting me, laughing at me. So much for my high hopes of finishing Bioshock it today.
 
I am now struck with a difficult choice, my warranty expired, but yet according to Xbox.com RRD is still covered, 3 year warranty must have begun when my console was last heal of its three red lights in the summer of 07. So I shall send my good friend to be replaced, but the questions is, do I grab another 360 in the mean time, can i go without a 360 for upwards of 3 weeks? Bioshock 2 is a tempting prize, but I do believe that the next big releases are mostly PS3; be it Heavy Rain, God of War III, and Final Fantasy 13. I can not think of another 360 game I need to have in the next month or so, maybe I am forgetting something.

Very temping to head out and acquire a new shiny 360, one with a much bigger hard drive, as I have been burdened with a 20 gig drive since launch, a drive that is now perpetually filled. Decisions, Decisions...

Don't fall for Microsoft's evil plan to make you buy multiple 360s.  Get them to fix it and just wait.   
 
30 million 360s sold, 18 million died prematurely, 9 million purchased a newer version = 21 million 360s sold in reality. 
 
(Note: these numbers are a made up)

So wait, you're asking if you should buy another Xbox 360 because you want to play Bioshock 2 badly or wait 2-3 weeks for the free replacement? Do the latter. Bioshock 2 is a good game (multiplayer is complete garbage) but definitely not worth the price of a new 360.

I know it doesn't make any financial sense, its the timing that pisses me off. I knew it was only a matter of time, this xbox was too old to stay working for much longer. I could use a bigger hard drive and HDMI, there I go convincing myself again...

Ugh, that sucks man.  When mine broke two weeks ago, it was well out of warranty.  Good news if you're getting a new 360 Arcade system though:  Gamestop, Best Buy and Toys R Us are all giving out $25 giftcards with the purchase of a 360 Arcade this week.  That could be put towards Bioshock 2.  Just a thought.  I think I'll be picking an Arcade up this week.