They are full of shit.....you're contract is with the retailer, not the manufacturer.
Less than 6 months, the onus is on the retailer to prove there is "NOT" a fault, 6 months to 1 year, the onus is on the owner to prove there "IS" a fault.
Any service provided by MS for exchanges is provided by them over and above your rights under the Sales of Goods Act...what this means is that while MS might offer to replace it, the retailer still has a legal obligation to do so, though they themselves are quite entitled to send it back to MS on your behalf.
http://www.berr.gov.uk/whatwedo/cons...page38311.html
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