Heat needs to be removed from your xbox for it to function properly. If you are starting to see random lockups and odd artifacts in graphics it may be time to clean out your console. Keep in mind that in game lockups can also be caused by DVD issues but if can stick your xbox in a cold place and notice that this gives you stable play time read on.
If your Xbox only locks up only during games and especially only in specific spots during games read here to find out about dirty disc errors, if your Xbox locks up even in the green navigation screen continue on.
Buy the enhanced cooling kit here
Opening a console (voids warranty) Remove hard drive and DVD drive, leave the rest of the system intact
Start by blasting out the heatsinks with compressed air and work your way out from there, the heat generators are circled in red and the cooling inlets and outlets are in blue.
Continue by cleaning the dust from the surface of the board using compressed air. If you got a fresh new can of air, be sure to use some of it first so it doesn't spray out the liquid propellant while you are moving it around. Coating your board and electronics with this subzero liquid can cause damage.
Pay special attention to fully clean the air holes at the front and sides of the case
When reassembling an aftermarket heatsink can be added to the Nvidia MPCX chip to allow it to cool more effectively.
I tracked down some 1X1X1/3 inch ones with self adhesive thermal pads to do the job (available here). You can also find these at the local computer store or salvage one from an old motherboard if you have some adhesive thermal paste to affix it.
Once you have thoroughly cleaned the motherboard using compressed air, remove the backing from the heatsink and place it squarely on top of the chip, continue to put firm (within reason) pressure on it for two minutes.
Now to take the last step to improve cooling as much as possible we will replace the standard power source for the fan with a higher voltage one to make the fan run faster.
By using a standard pass through connector such as this one we are able to tap the hard drive power and connect it to the case fan. By using the power supplies full 12V power as apposed to the motherboards 7-8 volts we increase the RPM of the fan. The fan blows harder, more noise, and more cooling.
I know this will make a big difference in the cooling, I don't know if it will fix your system or not. If you are getting random lockups this will probably be worthwhile at least reducing their frequency. Each situation is different, some will perform these mods and see no improvement some will see perfect performance after the changes.
I plan to repeat this mod and offer some numbers to be able to quantify how much this improves cooling, by getting some before and after exhaust vent temp numbers. If you perform this mod and have a thermometer your numbers would be appreciated as well.
Buy the kit here
Some stats from Anthony on his results using the cooling kit
Thought that you might like some feedback on the temp changes after installing a cooling kit. Changes below read before and after from the dash... non-game play. Xbox was just sitting after booting.
MB decreased 5 degrees F
CPU decreased 15 degrees F
HD decreased 10 degrees F