It's normally an over heating problem. The heat builds up and in some instances soldering joints can become loose, or detempered causing the joins to split, these leads to a general hardware failure, which the 360 self diagnoses and shows using the infamous red ring of death.
I have never had it, i've had my xbox fail but in a different way. All of my mates who have had it, and i, simply got a new one sent via UPS direct to the door. MS support is actually really helpful here.