I work retail and sell protection plans - the things you must know are:
1. Most consumers will never use the plan, so technically it "goes to waste", BUT...
2. It's not about whether or not you USE the plan, it's the peace of mind knowing that if you DO need to use it, it's there for you. You actually don't WANT to have to use it, because that means that your item failed on you.
(Some people say, "I'd better have to use this in order to feel better about buying it.")
3. AppleCare has some of the best support you'll find in the tech industry. The people are nice (both in person and on the phone), and generally help you get your problem worked out as quickly as possible.
4. AppleCare does NOT cover accidental damage (most plans don't.) They're basically assuring you that for 3 full years from the date that you *purchased the item* (not from the date that you bought AppleCare), you'll have a machine that runs the way it should.
5. (Related to above): AppleCare comes free for the first year on all new items as your 1 year limited warranty. You have up to a year to purchase it, but if you wait until then, it only adds TWO additional years (total of 3) to the computer you've purchased (I think it's only one additional year for the iPhone.)
If you wait until the year is almost up, you'll also lose out on up to 9 months of free phone support, as you only get 90 days of free support with the AppleCare that comes with the machine. If you buy it within that first 90 days though, you'll get the full 3 years of free phone support as well.
And finally...
6. AppleCare is obviously more expensive through the manufacturer (Apple), but there are third party websites that resell Apple's warranties at a somewhat reduced price, such as
LA Computer Company.
Is AppleCare worth it? I got a great deal on it for my Mac Pro, and I've started having issues with my fans recently, so I'll be taking it in for free fan replacement at my Apple store before the warranty runs out in January. Even if I didn't have to use it though, it was still worth the peace of mind knowing that my machine was running the way it's supposed to.