Depends. I know a small number of folks who have returned their Xbox's after they have red-ringed. My box red-ringed after imoved back into the hosue after the accident, MS replaced it for free, I didn't even pay for shipping.
None of the others were charged for replacements. What they MIGHT do, is put a hold on a CC, if they find out say, that you actually hit it with a hammer or dropped it in the pool, and they figure that out when the get the RMA. That's a common hardware RMA tactic, Dell does it, Sun does it, HP does it. If everything is "kosher" then they don;t actually process the charge. MS didn't do that to me when I sent my box in, but that doesn't mean they won't or don;t do it in some circumstances.
I'd dig a little deeper into who was charged, it certianly isn't commonplace.
Slag MS for
of things, sure, but this one is a lot of hooey and rooted in pure anti-MS sentiment for the sake of anti-MS sentiment. And thats crap. Re-posting is just contributing to a bull**** rumour as far as I can tell, and that doesn't help anyone.