Since posting this story, Xbox-Scene reported that the foil might actually be a necessary component, and not something that causes overheating:

"Several people on our forums say that this 'Indium' foil has probably been placed there intentionally, is part of the thermal pad and should not be removed. Apparently similar foil is used some OEM PCs, P4 and some PC GPU chips. While it looks like most people agree that normal thermal paste/compound without such a layer usually works better, one of the advantage of such a layer is that a heatsink can easily be re-installed without re-applying thermal paste after you removed it."

Regarding the Xbox 360 auto-update issue, however, we're still waiting on a response from Microsoft.

Original Story

Remember all those initial reports on the Xbox 360 overheating and locking up on people? Some said that the next-gen console's huge power brick was the source of the problem, and that it needed to have proper ventilation in addition to the hardware itself.

Reports out of Germany (via Kotaku and Xbox-Scene) have found an entirely different culprit, however. A German modder claims to have dissected some Xbox 360 consoles and found that during the manufacturing/assembly process someone forgot to remove the protective layer of foil from the GPU heatsink's heat transfer pad. This would naturally lead to the components getting quite hot—the opposite of the effect a heatsink should have.

"The way it's installed now by MS the GPU chip makes contact with the protection foil instead of the heat transfer pad. This can of course cause cooling issues for the graphics chip as for optimal cooling performance there should just be a thin layer of thermal pad between the GPU chip and heatsink," said a post on Xbox-Scene.

In related news, reports on the Internet have revealed that some Xbox 360 owners have been experiencing problems with their consoles after downloading Microsoft's latest Xbox 360 update. After downloading the update, some claimed that their console immediately locked up.

One frustrated gamer on the official Xbox forums wrote, "My Xbox was fine until the March update [and] now it freezes up after 10 mins of gameplay. Why cant they just leave it alone? They should have held off releasing this piece of junk until it was ready. Anyway off to eBay I go and sell my 360; I can't be arsed with this forced updates. It's nothing but trouble."

"Mine started freezing up last night after I updated as well. It has to be the update. It was running fine for a week straight," said another poster.

Added another: "I purchased a 360 on release day, and have been playing it constantly since then.. I have never had a single freeze up or issue with my system at all. Yesterday I log on and am greeting with a message that there is a mandatory update for Live. I let it go through the process of updating, and once the system reboots, it immediately freezes. I tried rebooted and got the dreaded Red Ring of Death (RROD). I have tried unplugging and replugging everything back into the unit, and I cannot go longer then a few moments without the entire machine freezing... from that point I get the RROD until I power everything off and remove the cords...

"The update killed my 360. Plain and simple... This is, without a doubt, the worst handling of a console I believe I have ever seen... I can't even exchange and/or buy a new one due to the fact that NO ONE has them in stock... almost 4 months after the release."
Larry "Major Nelson" Hryb has responded on the message boards that Microsoft is currently looking into the situation.

We've contacted MS and are still awaiting word on both the foil report and the update issue.