In response to the recent Mercury News interview, a man who has had 8 consoles fail so far explains what he believes the issue with the hardware is.
"When the system gets too hot, the combination of loosened solder with a mainboard that flexes from heat causes the GPU or CPU to actually break its connection from the board - resulting in the 3 red lights and secondary error code 0102 (the "unknown hardware error" code).
This is true of ALL systems manufactured thus far, not just the launch systems. Hopefully, Microsoft's new measure of adding a heatpipe to the GPU heatsink will reduce the heat on the mainboard itself enough to keep this from happening. We shall see."