Last night, a press release was issued, and information was posted on Xbox.com, about a retrofit that's available for customers of the wireless racing wheel. 

From Xbox.com:

As a precautionary measure, Microsoft Corporation is voluntarily providing its customers with a free retrofit to the Xbox 360 Wireless Racing Wheel. The Wheels were manufactured during 2006 - 2007. A component in the Wheel chassis may in rare cases overheat and release smoke when the AC-DC power supply is used to energize the Wheel.

There have been no reported incidences of fire, personal injury or property damage due to the Wheel malfunction. Despite no known safety incidents, we are advising our customers about this because of our strong commitment to ensuring that our products are safe and perform to our design specifications.

Owners of the Xbox 360 Wireless Racing Wheel should visit www.xbox.com/support or call Microsoft at 1-800-4my-Xbox to register to receive the retrofit and protect against the potential hazard described above. Instructions will be provided with the retrofit. We are notifying and will be coordinating our response activities with the relevant regulatory agencies such as the US Consumer Product Safety Commission. This may impact delivery dates.

Owners of the Xbox 360 Wireless Racing Wheel should stop using the AC-DC power supply until they have obtained their retrofit. Owners may continue to operate the Wheel using battery power. While operating in battery mode, the force feedback feature will not be available. Once retrofitted, owners may run the Wheel using AC power and reactivate this feature.

Get Started Now
If you have a Wireless Racing Wheel, print out the retrofit form, complete it, and send it in. You'll receive information soon from Microsoft regarding your retrofit. In the meantime, use your Wireless Racing in battery mode.

For further information and support, please contact 1-800-4MY-XBOX.