OK... too many times I've been ask
don't cry if you see thislol And don't buy a new one ! They replace it! FREE!
(PS: I paid for shipping, in Canada about 15$, cheaper than a new one, and I used the original box, they ship back in it)
Microsoft has extended the warranty for this... Call the "X Box" customer support, they will ask for the serial number, your name, address... for their files. They might send you a box or will ask you to send the "broken console" to a specific address (if you understand it, I did but sure thing someone not used to a strong accent will not) depending of your geographic area.
Keep your HDD, memory unit, remote, game pad... etc Just make shure to only ship the console
Then they will ship you one that had the issue and as been repaired (It will not be the same one, you will notice the serial number is not the same) and voila! that's how to deal with the red thingy that make people freak and spend money on a new console...