Their track record with hardware is indeed going down hill. They seem to be okay with warranty and other services though. To be fair, I have no clue how they treat the typical home customer. My oldest brother came up with a decent name for a recording studio about ten years ago. We never got things off the ground with it, but we have been telling Dell we have a small family owned business by that name. Ever since we can get business computers, which lack all that bloatware and usually have more options to choose from when ordering (like getting XP and not getting an AV pre-installed). The customer support also seems to be superior according to what I hear about them, but have never experienced.
As to the main point of this topic, I'm surprised the fessed up so quick. Seems like they did the right thing in the end by admitting the problem out right. Better than Apple at least.