So I've been helping a friend with a console. Well i took the heatsinks off and popped off the xclamps. I put artic silver thermal compound on the gpu and the cpu and Put everything back together and turned it on. This time i only got two red rings of death.
 
So i don't have a clue of what to do. a lot of the youtube videos don't do the best job of explaining just the two red rings.

Im not going to go into a lot of detail, but just google RROD and their are a lot of videos that will show you what to do next.

Won't help for long, eventually it will fail.... I have fixed 4 360's and eventually they all end up failing again. currently i have 4 rrod 360's and 2 working ones..
 
but u did the fix, now all you need to do is make the 360 forget that it failed, overheat it... then leave it for 15 minutes, then turn it on. It will then work
 
some of my 360's have worked for over a year after i x-clamp fixed them, but in the end. they always fail

RROD > 360 

I was just "cooking" mine
Wrapped er in a couple towels, and let it run for 1/2 hour
Turned it off waited 10 min or so, And it would work the rest of the day
(It was 3RROD)
But was to much of a hassle so I just replaced it.
Old ones in my spare room, I use it for GTA & shit while I'm smoking (when it works) lol

The only fix is to call up microsoft to get a new console, all this towel bullshit is for pirates.

I used the towel trick because my 360 got RROD the day I got Fable 2, so I was desperate. It only lasted a couple of weeks though, but it's a good way to make your 360 make that final stand.

UPDATE: guys i figured out what the problem was, Its all about the heat. because the cpu heats up, it needs somewhere to go. Heatsinks absorb it, but apparently the metal studs for the heatsinks were only getting in the way of the operation. I pressed hard on the heatsinks and booted up the console, dashboard turned on just fine, as soon as i let go of those heat sinks tho. The 2 red lights came back, i was experimenting a majority of the time. 
 
I'm not being a fanboy, but give me a break. Even tho i got kind of a business skill out of this, microsoft is wrong for creating such a terrible heat absorption architecture for this console. unless of course they did it on purpose to gain millions back, this is ridiculous! my friend actually thought he was going to be forced into buying a new console. but i kept telling him no, i know i can fix this. At least i can say that i won't try to take advantage of people when they need help to repair a console they just bought for their kids with possibility the last money they had.
 
Also, another thing. a lot of the videos on Youtube don't help. they need to go into full detail to help create confidence for people who have the guts to open the console in the first place. sometimes the measurements don't add up and the heatsinks vary from console to console. Such a big mess, i am just blabbering on and on.

" So I've been helping a friend with a console. Well i took the heatsinks off and popped off the xclamps. I put artic silver thermal compound on the gpu and the cpu and Put everything back together and turned it on. This time i only got two red rings of death.  So i don't have a clue of what to do. a lot of the youtube videos don't do the best job of explaining just the two red rings. "

it is most likely the heat-sinks aren't on fully or something like that. the 360 probably doesn't see the heat sinks on so they just overheat. 2 red lights mean that it is over heating.

With the Arcade under $200 and my system out of warranty. Would any of you suggest I buy a new system or attempt to repair  it myself?

" With the Arcade under $200 and my system out of warranty. Would any of you suggest I buy a new system or attempt to repair  it myself? "