So i went to Best Buy, the dude plugged it in, saw the error message and said "I've seen enough". Obviously they get this all the time. He said I could choose which XBox360 package I wanted. Naturally I chose the Elite with two free games (Halo 3 and Fable II), and didn't have to pay a dime in regards to this, even though my old one was a Pro.
However, this being my second returned one, I had fulfilled all of the extended warranty coverage, which is an infinite number of returns the first year and only one the second year. So, this was my one for the second year coverage. So I of course bought another extended warranty to cover these pieces of shit.
So, all told, I paid $120 for Halo3, Fable II, a bigger better hard drive, two more years of coverage, a working XBox360 that is black instead of white, a new undamaged controller since my old one was thrown down from frustration, and piece of mind. Not bad.