This is not correct. Companies are obliged to honour the prices they advertise (otherwise they could just lie in all their price labels); however an exception is granted for "good faith errors" where the price offered is "clearly unreasonable". It's questionable that a £120 for an Xbox 360 is a price that a reasonable person would consider so absurd as to be clearly wrong; whereas if, say, they'd advertised a £4000 telly for that price it would have been.
There have been, needless to say, numerous court cases over this; especially since internet sales came into being.