I bought one too, and I knew about the issue. PS3 was too expensive for my blood and I prefer XBox games over Wii games. I also knew that MS wasn't being an ass with returns. Mine has held up so far though, so I don't know firsthand.
Xbox live is pretty nice as well; I'm not a huge fan of the "New Xbox Experience", but I can appreciate that they've put a lot of effort into it.
I'm not a fan of the new experience either in one respect: if you're going to force me to choose an avatar (which is annoying) at least make a creator as good as Nintendo's. I find myself unable to make reasonable approximations of anyone I actually know. Also I don't care for where it starts you out now, on that little shopping area. Other than that I find it generally a more efficient navigation system.
Also, Worms on XBL Arcade cost $5 and is my favorite game ever.
The Wii has a lot of potential. I think that the control scheme is second-to-none, and that after Mario Galaxy (which showed just how effective it was) we ought to have seen a proliferation of good third-party add-ons. As it is, Nintendo is carrying the console itself, but it's proven itself fallible. It's still the single best game developer in the world, and its design team is head-and-shoulders above the competition. But the rest of the company isn't quite as top-notch, and it shows, and it unfortunately means Nintendo's ridiculous advantage over Sony and Microsoft is being entirely wasted.
Their online gameplay was half-baked from the start. The day I got my Wii (2 days after it launched) I also bought Madden, only to end up pissed when I realized there was no online connectivity. It took forever for that stuff to actually work, though I will say that now that it's there, and unlike Xbox it's free, it's pretty nice.
Reliability is not what most people look for when buying a console, so I don't think it hurts their sales terribly; but all of these problems cannot be good for Microsoft's bottom line.
I'm on my second 360, and other than the terrible phone support, their RMA process is decent. But when I bought my 360 I knew that this might happen because of all the other reports of RRoD out in the wild.