According to modcontrol.com, the first wave of Xbox 360s overheated because, when Microsoft built the machines, it forgot to take the foil wrappers off the heatsinks. They checked on 2 independantly bought Xbox 360 consoles and found that the protective layer on the GPU heatsink's heat transfer pad didn't get removed during assembly. The protective layer was probably put on by the manufacturer of the heatsink to protect the heat transfer pad from dust, before final assembly.But the failure to remove the wrapper caused the GPU chip to sit against the plastic protection foil, instead of the heat transfer pad. This video(16MB) clearly shows the protective foil as they remove it.