It's coming from the Daily Mail, so make what you will of that, but the British tabloid is claiming that Microsoft is setting aside £500 million - which is just shy of USD$1 billion - to help cover the costs of an increasing number of faulty Xbox 360 Elite units. They'll also apparently be offering a three-year extended warranty for Elite owners. Both the value and warranty are the same as those offered last year, when Microsoft was forced to pay up and extend the warranties for owners of original 360s. The Elites, however, were meant to be improved consoles, nowhere near as susceptible to the red rings of death as their off-white cousins. We'll update when we hear something a little more...official, because really, we find it hard to believe they've sold that many Elites.

£500m bill for Xbox red ring of death [Daily Mail]