yes a lot of people have reported it runs hot
there arent any heatsinks inside … see this comparsion of older models
http://community.wd.com/t5/WD-TV-Live-Streaming/WD-Live-TV-SMP-Very-hot-on-standby/m-p/509546#M14751
and here is inside the new WDTV’s
http://community.wd.com/t5/WD-TV-Live-Streaming/WD-Live-TV-SMP-Very-hot-on-standby/m-p/463610#M11896
another user added his own heatsinks: http://community.wd.com/t5/WD-TV-Live-Live-Plus/WD-TV-Live-Streaming-player-getting-super-hot-and-having-random/td-p/611147
I guess you could try flipping it over … so the the holes are on top (might disperse the heat quicker)
Or someone suggested a Laptop Cooler Pad (which could be powered by the WDTV’s usb)