Will applecare cover this?

I would hope/think so. Call Apple.

they should. I dropped a small book on my Pb and key came off. I couldn't get it back in and told them i was typing and it popped off and they fixed it.

yeah i dropped a big book on mine

i didnt tell them that i just said a key came off and i couldnt put it in

it was also the H key hehe

my friend has a revA 12" powerbook and the "fn" keycap drop off. applecare didn't cover that, and the whole keyboard would have had to be changed to fix that. being so expensive my friend decided to leave it as it is - ugly as hell - because it is still functioning perfectly. one can press the "fn" key although there is no keycap anymore. luckily the "fn" key is not needed on a regular basis.

in my opinion applecare should cover this, but in my friend's case it didn't.