Replacement iPhone 5 from Apple new or refurbished?

I care.

Well I got my replacement iPhone from FedEx today. The back had two or three scratches on the grey adonized aluminum part, as well as what appeared to be a small watermark/stain below the camera. Good news, no rattle at all, which is what I expected. Right now my phone sounds like there is a small metallic object loose near the camera rattling around. It's quite audible and very annoying. Also, there appeared to be what was a white epoxy like substance clumped in and around the entrance of the headphone jack on the bottom of the device. My guess is that they probably reseated the battery, which is right above the headphone jack, and got it into the jack canal. Very sloppy work if you ask me. So much for the replacements being as good as a new in box, sealed device.

I sent it back immediately, a half hour after getting it and am setting up another replacement with Apple as we speak.

Exactly. Keep in mind that if you have a third-party repairman look at the device, or really touch it in any way whatsoever, your warranty is voided with Apple. Chances are they won't even look at the phone for you. I've heard about this happening to other people I know. A friend of mine bought an iPhone 4 through Verizon, which was sold to him at a Verizon Store as a brand new device. After a month the sound stopped working and he took it to the Verizon Store where he purchased it, only to be sent to the local Apple Store. Apple looked it over and told him there were "gold parts" inside the device, as well as some rust. He was told the phone must have received water damage in the past, and that Apple doesn't use internal gold parts in their devices. So therefore he was on the hook, and Apple sent him back to Verizon. Finally he called Apple in California and got a new phone sent to him, but he never did find out what the deal with the rust and gold parts near the antenna assemly was. It's a really odd story.

My point is, once Apple thinks you've tinkered with the hardware, they won't do anything for you. So proceed at your own risk. As for me, I'm gonna keep fighting this until I get what I want, and think I deserve. I've been through two brand new devices and two white-box replacements sent to me by Apple through an Express Replacement (those replacements cost me $58 out of pocket). Now I'm going to start climbing the corporate ladder until I get a new, factory-sealed iPhone 5 sent to me from China that doesn't have any issues or overwhelming cosmetic flaws. That's what I should have received in the first place.