Few points:
1. Yes that kid should NOT be playing Gears of War, I'm fed up with Damned kids on there singing and having High pitched voices.
2. Radial scratches do happen unfortunately, it seems we finally have some reason (The Rubber pads around the Lens.) I've never had my 360 duff up disks luckally, but some aren't so lucky.
3. I would have liked to have seen a control experiment, and 2 other 360's set up in Vertical and Horizontal to remove the main reason for Radials, and just see if the radials are caused faster in Horizontal or Vertical (Or at all in the control experiment.)
4. Its a tad out of order on Microsoft to say "Ah yeah go for our disk replacement service! GIVE ME MONEY for our mistakes!", sure some gamers are to blame for duff disks, but a new deal should be struck up, if your 360 is causing the Radial scratches at no fault of your own (Hard to prove I know) they should replace the disk at the same time.
(Now just to plan that devious attack on the Euro repair center.... which is up the road

)