Microsoft has decided to end that policy, however. At the end of last month, the company decided to axe the expense of sending these prepaid cardboard coffins, requiring customers to get their own packaging. Not a big deal considering Redmond will still pay for return shipping. Microsoft, on the other hand, will need to sort through whatever random packaging a customer comes up with.
One advantage to the prepaid coffins was that it ensured the Xbox was packaged properly and wouldn't sustain further damage in transit. In any case, dropping the policy won't affect anybody's warranty, and minus the mere cost of getting your own packaging you will still get an in-warranty unit repaired for free.