I have the Game Of The Year edition and after a fair while (in the higher levels of the game, 25ish) the game would start playing up at different stages but it would ultimately shut the game gown and display the Xbox "Game Error" message saying my disc is unreadable.
Cleaning or restarting the console has no permanent effect. It becomes more and more regular the more I play and eventually the game will refuse to load pre-saved games.
If I start a new game it's fine.
If I use another FO3 disc it will eventually do the same thing, both discs are in good condition and have both been properly cleaned by my local gamer shop, any other games run fine.
It's so bad and recurring that I have never "finished" a play through (I have completed the ,main quests and all the extra quests like OA, the pitt etc) but never got to the stage where I wanted to start something else. It's always been because the game/console [censored]'s itself.
I'm currently on my 3rd play through, lvl 28 and I can't save the game, I have to rely on the auto saves.
In the past I've re-formatted my hard drive (wish I hadn't because I lost years of game achievements, saves and stuff) but that didn't solve the problem.
I've cleared the game catches but after that I couldn't re-load my old FO3 saves because the catches must of had some info required to load the old saves.
Basically I'm trying to find out if this is a problem anyone else has experienced or if I'm just not meant to fully finish FO3....any ideas?

I've never had this problem. And this may sound stupid but have you tried another xbox (I know it would take a while to get to the point where it freezes but it could be something to do with your console, just a guess) I know FO3 is renowned for playing up. Mine would freeze every now and then but never become unplayable like yours would.