Fix the Xbox 360 Red Ring
First I'll explain why none of the mentioned fixes are a good option.
1.
The towel method: The reason a towel is considered a suitable fix is because it can overheat the console until the system automatically resets itself.
It simply involved wrapping your Xbox in a towel until it overheats.
This is clearly not a wise idea and by doing so you are increasingly the chances of the problem resurfacing.
2.
Sending your Xbox 360 back to Microsoft: There is always the option of sending your system back to Microsoft for it to be repaired.
The problem with this is that Microsoft generally take several months to repair your machine, leaving you without being able to play your favorite games for several months.
The second problem with this is that if your system is older than a few years you will be charged several hundred dollars for the repair.
So this is probably something you don't really want to do.
So what is the best repair? By far the most superior way to fix your Xbox 360 is by ditching the towel and cutting Microsoft out of the picture by doing it yourself.
This may sound complicated but it really isn't.
Using an Xbox 360 red ring repair kit will both save you time, money and the longevity of your system.
The fixes can easily and quickly be purchased online and are usually extremely cheap with most systems being fixed and ready in less than an hour.