My 360 (like many others I know) broke down with the 3 blinking red lights of death after about 4 or 5 months and they sent me a brand new one. I dont think they will even try to repair it.
They are repairing them now, said so in an article I read somewhere. Refurbished could also mean someone sent in a busted console, they fixed it, and now they just sell it to you at a cheap price. They sent me another 360 when my 2nd one broke, and it was made even before my old one. Personally, I'd buy new, but if you don't mind refurbs, then it's probably fine.
remember, its refurbished for a reason and I have known many people who have had to replace a 360 due to there poor cooling (the new 360 elite is said to have far supirior cooling) and for a console the goes on the skitz so often, I wouldn't bother buying a refurb and buy new if its a 90 day warranty (unless you can pay extra to extend the warrenty)