bmat,
Also, if anyone in your house qualifies for education discount from Apple, the Applecare for Pbook is only $250.
I prefer to upgrade my computer, before the original 1 year warranty is over. Sell my current notebook and buy a new one. The $250-$350 I'd have to spend on Applecare, if I held onto it, helps make up the loss.
However, if I was going to keep a notebook more than a year I would certainly get extra coverage before that year was over. Notebooks are very costly to repair, and it isn't simple like a desktop, when the user can often just replace what goes bad. Also, if you use a high-end Visa, Mastercard, or American Express, you might have an extra 1 year of warranty through the card. Check your credit card details. My Mastercard and Visa give me 1 extra year of warranty on just about anything I buy, using the card.