Hell yeah it's worth it!
I bought a CPO iMac back in December '09, then put AppleCare on it just before the one-year warranty expired last year, hoping I'd never have to use it.
THEN, back in March, the monitor started giving off this distinct reddish-purple hue, with lines around the text. I brought it to my local Apple Store, who initially deemed the problem to be a faulty video-cable. However, the problem kept coming back and Apple attempted several times to fix the problem, even ultimately replacing the monitor itself(!), but to no avail.
They finally decided that it was cheaper to just replace the iMac entirely with a BRAND NEW 2010 mid-level model with better graphics (ATI 5670 with 512 MB memory vs. ATI 4670 with 256 MB memory) and a slightly better processor (Core i3 vs. Code 2 Duo).
Kinda wishing that the monitor didn't crap out until AFTER this past May's refresh, lol, but oh well. I figure if I didn't have AppleCare, the repair bill would've certainly been more than the cost I paid for the iMac!
On top of that, Apple paid me back the balance remaining on my AppleCare, which still had a little more than a year-and-a-half left of its 3-year coverage. So now I can apply that money towards covering the new iMac, because you better believe that I'm getting AppleCare for that one, too!