Microsoft's emergence against the failure rates of Xbox360s is on surge, as it has got the 'red-rings of death' flaw fixed and has offered an inducement to the Xbox360 owners by extending the warranty to three years and have promised to refund to anyone who has already paid for getting the red rings fixed. The company took the bold step after receiving numerous red-ring complaints.

However, few weeks ago, Microsoft had denied accepting flawed consoles, because there was an excessive arrival of consoles to be mended, hence could not be accepted any more.
As, all this isn't an inexpensive undertaking, the company will undergo an extra financial burden of $1.05 billion - $1.15 billion to get the bug fixed.
Microsoft executive Peter Moore has conveyed a message to the big Xbox community that the company has identified several factors that can cause a general hardware failure indicated by three flashing red lights and have already made certain improvements to get rid of the breakdown.

Is it enough?
Would 'the trick' work? Is it enough to bring back the lost trust?
With this move Microsoft might succeed in convincing some Xbox360 owners; still it's not going to make everyone happy because the damages that have been done will take a bit longer to heal.
The huge data that demonstrates the arrival of damaged consoles (for repair), proves the flaws in core system (which repairs could have fixed) that perhaps Microsoft knew beforehand. Therefore, I would take the dust-gathering fact with a pinch of salt.
Of course, there are uncertainties. Xbox360 owners who have gone through system failure, I really hope, have finally got their system fixed, however, simultaneously, fear that those systems would run smoothly in future as well, still lingers.
However, it's probably the best thing they could do, hence you can now send your console back and have it fixed for free for next three years after buying it. Microsoft will even pay the postage (lollz).
Via: Xboxic