WEhen you put it in the horizontal position, it will make a cluttering noise after alot of use, thats because theres an "imperfection" (such as a scratch on the side) on the disk that's playing, and on really rare occasions, if you move the xbox360 a little, it will ruin yur system. The xbox 360 was made perfectly for the vertical position, and everyone I know, whoshouse I have been to or something, that has also had it in the horizontal position, had the 3 rings of death.
I however have never had trouble with it, just make sure it's not where it tips of of a ledge, well ventilated area, and it's not easily tippable, and you'll be fine for probably a good 3-4 years.
I have hardwood floor, I keep it standing up, kinda in plain view, out in the open, in front of my television *cough cough** 40" sony full HD *cough cough*. And i'm good to go.