I had tons of problems with my Xbox 360 after I got it setup. First I had three red lights on the Ring of Light. After getting that fixed, my screen would freeze before the Xbox 360 dashboard would fully load. Eventually I got into Need For Speed: Carbon, but the Xbox 360 would freeze after a minute or less of gameplay. I also witnessed the E71 error message a couple times, fun fun. Microsoft has a page dedicated to freeze issues, although it didn’t prove to be much help in my situation. There are some good troubleshooting tips in there though.
Eventually, I was able to get my Xbox 360 to download an update from Microsoft. After the update was downloaded and applied, I had a totally stable Xbox 360. Downloading the update didn’t seem to work for everyone though. This guy claims his Xbox 360 started freezing after he downloaded the update.
I neglected to discuss the most popular method for fixing Xbox 360 freeze issues. There’s a very simple solution to prevent your xbox power supply from overheating. All you have to do is ensure your Xbox 360 power supply has proper ventilation. Don’t tuck it away back in a corner under a pile of dirty clothes or anything. Keep it out in the open, and let it see as much air as possible. Some people have turned to setting their Xbox 360 power supplies on top of an open box, that way there’s very little surface area touching anything. Setting the power supply on top of an open box will allow better air movement and will ensure air is able to move under the power supply, an area air wouldn’t normally reach if your power supply is just sitting on the ground. There’s some pictures of this method at the GameSpot forums, along with some other Xbox 360 Fixes. Unlimited Gamer has some more information on this method also. Blogcritics has a pretty good post covering a couple different solutions to fixing your Xbox 360 freeze problems.
One of the methods mentioned at the GameSpot forums that you should have your Xbox 360 plugged directly into a wall, not into a power strip or anything. Even if it is in the wall already, it might help to unplug your power supply from the wall for a few seconds and then plug it back in.