Hi there,
This is a hardware problem in older generations of the Xbox 360. What most people seem to believe is that the 360 should stand vertically, but do this and you will be covering the vents which let your 360 breathe. This is why you will see a lot of people bringing up the red ring of death, or people who have had their 360 scratch their DVDs.
My suggestion is to set your 360 horizontally. It's always worked for me and I haven't had a single thing go wrong with my 360.
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