I know GAME get a lot of stick on here, but I will say that I've always found them superb when it comes to things like replacements. Here's a bit more (detail, what I posted over at the DVD Forums).
Well just been down Argos to return the 360 (bear in mind that it's only two months old) and their response was that it was nothing to do with them and I had to contact MS direct to arrange my own repair. From reading a poster in the previous threads unfortunate experience with Argos I went forearmed with the relevant part of the Sales of Goods Act (Section 14) and the response from the store manager "Our company policy supercedes that" (no I'm not joking).
Just to be sure I rang Trading Standards when I got back home and they told me that Argos was 100% in the wrong on this, although not automatically entitled to a replacement it is the retailers responsibility to arrange any repairs within the 6 months of purchase and I was advised to write to their Head Office.
Now I'm not sure if it's worth it as on one hand it would probably be quicker for me to arrange my own repair than Argos if they dig their heels in and go for the repair rather than replacement route, but on the other I don't particularly like letting companies get away with cowboy antics like this.