most people who seem to be experiencing problems find it is to do with overheating of the console. There are many after market coolers made for the 360, and many report improved results having added them to the machine.
i am not on 'live'- online gaming has never appealed to be honest, so I have the 'core' system- no hard drive or modem, just the machine and a memory card. My mother has the same set up, and neither of us have had any problems with our consoles whatsoever. it is possible that you have a genuinely faulty machine Dereck, but improve ventilation and clearance space around it, and if it is on the floor, put it on cardboard instead of directly on a carpet. These are all things that have been said to work.
Game wise, Gears of War and Oblivion are the cream of the crop so far. Gears suffers the same as Splinter Cell, in that it is short in story mode, but it is an essential experience, and I understand that the online games are a lot of fun.
'Dead Rising' was a lot of fun, and had great scope, but did get a bit repetetive if I am honest. The same could be said of 'Just Cause', although taking a helicopter up to 10,000 feet and bailing out for a glorious free fall never gets tired
WWE vs Smackdown '07 is tremendous. the graphics are photo realistic in places (the undertaker in particular), and the gameplay is as refined as you would expect at this stage in the series. It wont make any new fans though- its still the same game as it was on the last gen consoles.
Same can be said of Fight Night Round 3. At first I didnt like this as much as FN2, as it is slower paced, but now I am in to it, it is much more involving and satisfying. Best of the series IMO (and the graphics-
If you happen to see 'Full Auto' at a knock down price (its an old game now), buy it- it is essentialy 'Burnout: Revenge' with heavy weapons
Possibly the most fun arcade racing game I have ever played- an ignored gem.
My next purchase is going to be 'Crackdown'. A massive free roaming (think Oblivion/GTA) game where you are a superpowered cop cleaning up a future-city overrun by gangs. All the playtests are saying its breathtaking, and takes 'sandbox' gaming to a whole new level. Thats right, better than any GTA, with added superpowers
I am also delighted that we are going to get Virtua Fighter 5, Resi Evil 5 and Assassins Creed later in the year.
Rumours are also rife that Namco are considering dropping the Sony exclusivity of the Tekken series, and will release Tekken 6 on the 360 in the future. Lets not forget that Soul Calibre 2 was an xbox exclusive on first release, and that with 10 million 360 owners out there, its a bigger financial incentive to widen their brand.
For these reasons, and the success of dead rising, it is thought that Devil May Cry 4 may be developed for the 360 by capcom as well.