You cannot prevent a RROD by keeping it on it's side. If your machine is fated to suffer the RROD, it's just gonna happen -- it's a problem with the internals of the machine. Overheating excacerbates the problem but it's still going to happen no matter how much you do to keep it cool.
I've been keeping my xbox on it's side since I got it. It's one of the models from before MS even acknowledged the problems and so far I havn't have an issue with it.
So to answer directly, lay it on the side if you like that better and don't worry about it.
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