It's true. These things are junk. One of my buddies, his 360 actually started smoking and it ruined his console. He got a replacement from MS$ though. Another one of my friends, his got brown like that, and I had to use an x-acto knife to get all the slimy melted plastic out of the power connector on the 360 itself. These things do a great job cooling, but be very careful, they can cause problems as well...
For my entertainment center, I just have a standard 120mm fan exhausting the back of the shelf so it doesn't get too hot in there. I just rigged up a 9v adapter with a molex on it for this purpose. This way my console stays cool and it isn't tied to the 360 in any way... Just a thought...