That's an interesting question. As you probably know, if you go out and buy a 5th gen iPod, you pay $300 (for a 30gb "upgrade")- about 10 replacements at your current rate. As a high school student, I personally don't have the cash, but it might well be worthwhile if you do. Nevertheless, I'd almost recommend that you give the "repair" one more shot. It's obviously up to you. One other thing you should consider, however, is connectivity. The 5th generations no longer use firewire, so if you don't have USB 2.0, you might be in for a long song/data loading time. I use my iPod as an external hard drive (well, not any more!), so that would be bad in my case.
That said, I don't entirely understand why you are paying $30 to send in the iPod for repair; it should still be under warranty from the December 2004 purchase and, if not, Apple's (meaningless?) 3 month guarantee for refurbs. You should look into this, because, sorry to say, you might be spending those dollars for nothing.
I'm contemplating a rather different sort of solution: a downgrade to a 3rd generation. I got my 4th generation after sending in a 3rd for a battery replacement. Apple messed up supposedly in my favor, sending me a 4th gen (and sending my personalized 3rd generation to someone slightly less lucky!). The thing is, if I am really good on the day of question, I might get somebody helpful on the Applecare lines who would set up a dispatch with my old serial number. They offered that before when there was the personalization issue, but I turned it down. Though, after these troubles, my 3rd Generation appears more and more attractive, shorter battery life notwithstanding.
I'm also considering writing a letter to Apple (if such a move is even possible). Perhaps they already do know of the issue, but it seems to me that it could be in their best interests to simply
send people 5th gens. That way they wouldn't have to have so many wasteful returned requests, and customers wouldn't likely ('cept for the USB issue) complain. But there's the problem that 5th gen's aren't made with 40 gb hard drives. Hmm.
