Even if your new slim Xbox 360 console malfunctions, you won't be getting the now-infamous "red ring of death" error. That's because Microsoft has actually eliminated all of the red LEDs from the system's internal make-up. Instead, any sort of problem with the console will now be displayed using various combinations of green lights, GameSpot reports.

While we're relieved to witness the end of those dreadful red flashing lights, we're still skeptical about the new 360's reliability. Microsoft made a point to mention the new system's "whisper quiet" operation, but failed to directly mention any sort of improved quality control on this latest model.

Of course, we're sure the company has taken measures to avoid the unacceptable failure rate the Xbox 360 has suffered, but a little humility would have been reassuring. The overwhelming number of failing Xbox 360s has been well documented since its launch in November of 2005, with yours truly having just shipped his fifth (yes, fifth) Xbox 360 back to good old Mesquite, Texas, for repair.
Source CNet:
New Xbox 360 won't red-ring even if it wants to | E3 2010 - CNET Reviews

And heres some more information on the inside and why the systems are better than ever
Anyone can take a hammer and rib-spreader to a new piece of hardware. But it takes someone like Anand Shimpi, the man behind Anandtech who has personally suffered through four out-of-warranty Xbox 360 failures, to bring sage analysis to a teardown of the new Xbox 360. His reluctant sixth Xbox 360 is the new slimster (codename Valhalla) which, for the first time, combines the CPU, GPU, and eDRAM onto a single chip -- previous Xbox 360 motherboards featured two discrete packages that split the CPU from the ATI designed Xenos GPU and eDRAM. The design allows for a single heatsink to be cooled by a single, larger fan making the new Xbox "noticeably quieter," measured at 45dB when idle or 51dB with the 1.5Gbps SATA Hitachi HTS545025B9SA00 with 8MB buffer spinning at 5400RPM -- that's down from 50dB and 54dB, respectively, as measured on late 2008 through 2010 Jasper-class 360s. Regarding power consumption, Anand measured a 50% reduction from the original 2005 Xbox 360 (25% less than Jasper-class rigs at idle, or 20% to 17% less under load) and pulled just 0.6W when "totally off" compared to the 2W of vampire power pulled by older 360s. Anand speculates that Microsoft might finally be using cheaper 40nm components. However, we shouldn't expect to see a price cut anytime soon as it will take Microsoft awhile to ramp up the material and manfucaturing cost savings. Regardless, with Kinect and several new game titles on the horizon, Anand concludes that there's still pleny of life left in the old Xbox 360 platform for those looking to make the jump

Source Engadget:
New Xbox 360 gets a proper teardown analysis: power and noise reductions confirmed -- Engadget