Looks like Microsoft now have their new 65nm "Falcon" CPUs in full swing for freshly built XBOX360s, along with a revised/superior heatsink design to boot. Unfortunately the XBOX360 has a nasty history of hardware failures due to excess heat buildup but supposedly that'll now be a thing of the past with these new models to start flooding shelves.
The lads over at Dailytech have several photos of the new internals along with a bunch of other relevant info here.
When it comes to computer processors, the advantages of a die-shrink are undeniable. For chip makers - and overclockers - a processor manufactured at a smaller process can open up more headroom for faster clock speeds, or decrease power consumption and cooling requirements. A die-shrink is a much-lauded happening in the computer world. For consoles, however, a die-shrink usually occurs without much fanfare - except in the case of the Xbox 360. Gamers have been waiting for months for the arrival of 65nm Xbox 360 chips, with the hope that the cooler-running processor would mean more stable hardware.