We've shown you how to stream DivX/XviD video to your Xbox 360, but here's a hack for dealing with a much simpler problem - the 360's noisy fan. ExtremeTech likens the sound of the Xbox 360 fan to that of a Cessna revving for takeoff, and gives a walkthrough for replacing the fan with a quieter one. The article does note that opening the console does void the warranty, and also that you'll still get noise from the DVD-ROM. However you should have a quieter time when playing Xbox Live Arcade games or watching downloaded or streamed movies or music, since they don't trigger the optical drive.
You can buy a fan which is customised for the Xbox 360's fan mount - for this exercise they use a green Whisper Fan. If you're DIY minded and have the proper tools, you can unlock and open the console case yourself, but Extreme Tech says they opted for a Team Xecuter 360 Unlock V2 kit which cost $12.
The article goes on to give a full walkthrough with pictures, and sums up by saying the new fan is "startlingly" quiet. It's up to you to decide if the risk of voiding the warranty is worth it for quieter performance.

Hacking your Xbox 360 fan [ExtremeTech]