Probably not, but it kind of depends. The new 4GB Slim model goes for about $200US, so if you don't really use the HDD for anything but game saves, you'd probably just be better off selling yours on eBay and buying a new 4GB Slim.
If you like to store games on the HDD as well, or download movies, etc from Xbox Live... Then you have to ask yourself if it's worth an extra $100US over the 4GB model to get a 250GB HDD. Or spend that money getting the system fixed. I think MS has a flat rate $140 repair price, but you should be able to verify that with a little Googling. What usually ends up happening is they just ship you a refurbished unit that is as close to the same generation as yours. Then they give you a 90 day warranty, and a 1-month Live card. But you're on your own getting the system to them. They'll provide a shipping label, but you have to provide the box.
And of course if you have any interest at all in Kinect, the new Slim models are clearly what MS had in mind when designing Kinect.
You could also potentially find someone selling a system that has the RROD issue, but the optical drive is fine. You'll need a special tool to pop some latches on the 360 case, but you can practice on the RRODing one so it's no big deal if you bend it all up. After that, just swap drives. No firmware issues to worry about, and if you play on Xbox Live, it's a "genuine" Xbox 360 drive, so should be no ban issues to worry about.
So, you have to ask yourself just how much of an excuse do you need to get a new 360 Slim, possibly with Kinect.