Firstly, on eBay there have been many e-books on how to fix this problem your self - DON'T DO IT!! These involve removing the casing and having a go with a soldering iron. This is just stupid. It will invalidate your warranty and probably won't be a perminant solution - a friend of mine paid £5.99 for the inforamtion, it worked for TWO DAYS then the same problem cropped up.
MICROSOFT will fix this problem for you FOR FREE IN OR OUT OF WARRANTY. Ok, if it's out of warranty you THEY WILL ONLY DO IT FOR FREE IF IT'S LESS THAN 3 YEARS OLD, if older you have to pay the shipping via UPS, but at least the work is then under warranty and WILL work.
EVEN IF YOU BROUGHT YOUR XBOX 360 SECOND HAND, IT MAY STILL BE UNDER WARRANTY, OR LESS THAN 3 YEARS OLD FOR A FREE FIX!!!
My xbox 360 got the three red lights, not always, but it became very regular. I logged on to www. xbox . com/ support (REMOVE SPACES - EBAY WON'T LET YOU ADD LINKS TO ADDRESSES WHICH AREN'T THEIRS!)
You enter your serial number, and you are told if it is still under warranty. Don't panic if it's not, they will still fix it, you just have to pay for the shipping.
Mine was, so I added my details and booked a repair. UPS then send you a shipping label, and you log on to their webite via a provided link and book collection. UPS collect your xbox, and you track it via their website to Germany.
My xbox 360 arrived two days after it was collected at 0535 in the morning. I then received an e-mail at 1032 the same day to say it had been repaired and had been shipped back to me.
My xbox 360 was repaired and back to me within 1 week! microsoft know the xbox 360 has this problem, which is why they are bening over backwards to help their customers out.