I've had my 360 for absolute ages now and it is boxed in next to other bits and pieces the back is virtually against the wall and it is left on for days at a time and i've never ever had any problems whatsoever

and it is standing up
I'm thinking you just have a dud of a machine as you couldn't get more enclosed in than mine it has a mini fridge bang next to it running all the time and dvd,video,sky stacked up next to it and all in a cabinet so no air goes near it... can you not send it in for warrenty repair?
Martin