Yeah, the warranty lasts for 3 years covering the Red Ring of Death, I bought mine two summers ago and it died in September, the one I have now supposedly has a new chipset so it should run better.
If you buy one that's been manufactured like within the last month, they just started putting out Xbox consoles that have newer chipsets with smaller processors that run cooler and with less power (meaning they are more reliable). You should be fine with the new Xbox Arcade consoles, since they've just been made, although I heard they're going to start having 256MB onboard some newer ones instead of including a memory card (for the NXE update).