“After several reports of consoles catching fire, Microsoft urged 14 million console owners to send in their old power leads for a replacement. But hardware experts point out that the power cable was never at root of the problem: it simply made the existing problem worse. The meltdown, and subsequent fire risk was actually caused by wear and tear on the power supply used in early models of the Xbox. The replacement cable featured a trip, which cut down the risk of your house catching fire, but left unfortunate gamers with a fried console. The cord has an interrupter switch that acts like a conventional fuse, tripping power to the unit.”
Ahh geez, how nice. Check out the read at the Register. It links to an online petition to try to get MS to address the problem, rather than cover it up.