I read pretty much all of these responses as well, including the posts written by people with extended warranties that were not honored due to apple naming the culprit as "water damage".
Also, I have just gone through the Applecare protection plan Terms and Conditions. In the Limitations section, i encountered this beauty:
"+(ii) Damage to the Covered Equipment caused by accident, abuse, neglect, misuse (including faulty installation, repair, or maintenance by anyone other than Apple or an Apple Authorized Service Provider), unauthorized modification, extreme environment (including extreme temperature or humidity), extreme physical or electrical stress or interference, fluctuation or surges of electrical+
+power, lightning, static electricity, fire, acts of God or other external causes;+"
I can't speak for anyone else, but if i am going to purchase an additional warranty for $50, I would like it to cover anything that could go wrong. I couldn't find anything about extending the plan, so i'm assuming that after 2 years, there is no warranty available for your electronic investment. If I were to get hit by a car and my ipod broke, I would want and expect Apple to send me a new one. I suppose Apple could just file that one under "accidents". Tornado? Simply a case of "extreme environment", or perhaps even an "act of God". What is an "act of God", exactly? I for one do not go to church and have no religious ties. I am, however, no stranger to religious people, and I am almost certain that they would file every circumstance as an act of God. And don't even get me started on these "other external causes"....
Basically, Applecare is just a way of saying, "If we mess up, we'll fix it, but only if you paid us money to cover our mistakes!" Why bother? Everyone should be held responsible for their own mistakes, not just responsible at the right price.
A few years ago, I received a Canon PowerShot camera for Christmas, which at the time was priced around $400-$500. My mother had purchased an extended warranty with it as well. Due to my own carelessness (I will admit to things when they are my own fault), the screen cracked on New Year's Eve. The next day we took it back and they replaced it (and upgraded it as they only had the newer model), no questions asked. When I bought Rock Band, the guitars had problems with the strum bars. I filled out some form online, paid shipping & handling, mailed it in, and received a new one (without the same problem the first manufactured ones had). Although Harmonix (or whoever made them) could have easily accredited the problem to people misusing the controllers, they accepted fault and fixed the problem. I didn't even have to buy a warranty.
Until May 2009, be wary, lest an angry God decide to smote your iPod.