When you pay $50 you get 2 years in addidtion to the original 3 years. I am not sure if I would do the 2 additional years now that they offer 3 years upfront. I would however do the 2 year waranty if the 360 only came with a 90 day waranty. My original Xbox broke and it cost $75(should have been $125, but thats another story) for them to fix it, so $50 isn't that bad of a deal. BTW, if you are going to do Xbox Live, I reccomend going to a store and getting a card to activate it. You usually get a free month(13 months) when you buy a card in the store as oppesed to 12 months if you just order it over your Xbox. I know it is only a free month, but do it for a few years and it adds up.