by 
The Curious Bag
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<h4 class="dechead">On One Hand: Xbox 360 Cools Itself
Microsoft designed Xbox 360 to cool itself. The Xbox 360 fan starts when the console is turned on, and it increases in speed when the temperature of the console rises and decreases in speed when the unit is cooled. Therefore, when the unit is placed in a well-ventilated area and the vents of the unit are not blocked, the Xbox 360 fan is sufficient.
On the Other: Some 360 Units Have Overheating Problems
Most Xbox 360 owners have heard of a little problem known as the "red ring of death." Some of the original Xbox 360 units had a problem in which they overheated, triggering the unit to show red lights around the consoles power button rather than green. When this occurs the unit can be sent to Microsoft for repair because in most cases the unit will no longer work.
Bottom Line
Older Xbox 360s made before mid-2007 may benefit from the use of a cooling fan if they seem to get hot when they are in use.
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