The main problem they had with the red ring of death was the part holding the chip down was a poor design, instead of using screws they used x clamps which flat out suck.
But as for the system you are referring too yes i heard of it. Its called a jasper system I believe (Jasper is refer to either the manufacturing company or the model not for certain which) The power required the system is a lot lower and the design of the hardware is a lot better from what I saw.
Here is a link to the article that will describe what's special about a jasper system and what to look for when buying a new xbox360. Take note people are view this from the stand point of hackers and are trying to make it portable.
http://benheck.com/12-10-2008/inside-an-xbox-360-jasper