I was going to trade up for a falcon punch system while mine still worked, but my friend got a new 360 from this past Christmas time and it RRoD'd as well. I think when my 360 dies again, it's over. I'm not putting up with this crap again. I have my PC gaming rig so stuff like Bioshock runs superior on, and the only thing I think i'll be upset missing out on if it doesn't hit pc as well would probably be Fable 2 and perhaps NG2. Small price to pay for not playing the free game installed on the 360 which is when you press the power button will it RRoD or not.
I love the game selection on the 360 up until this point, but there's not much for me to look forward to so far in 08 for it. Also multiplatform games don't usually interest me, but the games that do luckily haven't been a disaster on the PS3. CoD4 runs superior online with the PS3 compared to the 360, and Burnout is better overall. DMC4 is a toss up besides that I like the DS3 for it's gameplay better, plus Uncompressed Audio is a massive selling point for me.
I suggest if it's not under warranty, just upgrade your PC to handle the games if it can't already, and pick up a PS3. And, if this is "another death", if you get it back under warranty, trade it in while it still works. This is going to be the only way MS learns not to screw over their consumers.