the "red ring of death" is pretty much over; the newer xbox360s (code named "jasper") were re-engineered because of these issues.
Here is a link to an xbox forums post on how to tell if you're picking up a "Jasper" unit:
Xbox is a great console and much more; we use the xbox not just for games; it's our DVD player & we use it for watching streaming Netflix. (Microsoft also has their own movie rental service on the XBox which is also very good).
You want a unit with a big HD for two things; the games marketplace; where you can buy indie or older games and download them directly to the HD; and "Games on Demand" which is similar; but with "A" list game studios.