Microsoft has investigated the 'E74' issue on the XBox 360 and has recently concluded that they will cover repairs related to the error.
This will be included in the three year warranty program that was put into place in 2007 for general hardware failures.
To quote: While the majority of XBox 360 owners continue to have a great experience with their console, we are aware that a very small percentage of our customers have reported receiving an error that displays "E74" on their screen.
After investigating the issue, we have determined that the E74 error message can indicate the general hardware failure that is associated with three flashing red lights error on the console.
As a result, we have decided to cover repairs related to the E74 error message under our three-year warranty program for certain general hardware failures that was announced in July 2007.
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