Cromat is right it will have a auto shutdown if it gets too hot I bet
the 360 is not water cooled like most people think, in water cooling there is a bunch of components that are bulky(also they have to be refilled with more water ever so often), but with heat pipes they are much smaller and also produce no noise, but that are terrible at cooling that's why if you have seen the colony vid there is two fans on the heat pipe.
oh here's a pic of a heat pipe

with the 360 the pipe folds over instead of it going to a 90