You'll need a program called Jungleflasher. You'll need to extract the firmware (Drive operating system, it holds your DVD key) of your old drive with a SATA cable. Jungleflasher will take this key, and inject it into a separate firmware, which is called iXtreme. If you're using a different model of drive (The options are Samsung, Hitachi, BenQ, and LiteOn), you will need to do a process called spoofing. The new drive will lie to the 360 and say it is your old drive. So if you have a Hitachi drive, and the old drive was a BenQ, Jungleflasher will take the BenQ key, inject it into iXtreme (firmware), which will then be modified to make the Hitachi look like a BenQ, and then overwrite the Hitachi firmware. Complex to read, Jungleflasher has a PDF that explains every step.

Never use that towel trick, it overheats everything in the box, including fragile capacitors and ICs. Here is the overall summary to repairing a RRoD. Underneath the GPU (graphics chip) there is something called a Ball Grid Array. These are connections between the chip and the motherboard, and through heating and cooling, along with a design flaw in the 360, these balls can crack or become slightly dislodged. Since you are a beginner, I will overview the simplest fix, the X-Clamp Replacement. The other two methods which are better (A Wave Station Reflow and a Reball), are very advanced. You'll need T10, T8 Torx drivers, 16 M5 (Metric 5mm diameter) bolts, 1mm M5 steel washers, 8 M5 1mm nylon washers, a 13/64" drill bit, and some thermal grease. After removing the motherboard, you'll need to take off the GPU heatsink (the flat one). There are four friction-bolts on the heatsink that need to be removed with pliers. You'll need to drill 13/64" holes through the old T8 holes that held down the heatsinks. M5...