Usually this is the case on repairs. As long as the fault has been reported within the warranty period, it is repairable. If it is repaired and sent back and the problem persists, you should find they are obliged to still fix it. After all, it wasn't fixed for the fault first time and this was reported under warranty.
Just some information for you guys though, if you send a faulty iPod to apple under warranty, they rarely, (if at all), repair the item. This would be timely and costly. I deal with these every day and if it is a hardware issue, (e.g battery not holding charge, hard drive failure), they often don't even look at the item and switch them straight over. If you report something that could be something else, (say iPod not mounting on computer, which they could determine as software), they look over it and if they can't find a fault with it, they send it straight back as no fault found. To be fair, it doesn't always happen like this when you deal with Apple, but we deal with a company called CRC, which deals with all of Apple's UK iPod repairs. That's why we often get special treatment, (they know we have had a good look over it and so trust our diagnosis).
