Below is warranty information directly from the AppleCare page on Apple.com which gives all the warranty fine print. I just cut and pasted the stuff that stands out as important to deciding if it is worth it for you. Note that Powerbook AppleCare is quite a bit more than desktop machines.
The things that stand out in the fine print for me are: Apple's ability to use used or refurbished parts to repair your computer with. The fact that they don't have to fix it the problem is caused by accident, abuse, neglect, misuse (including faulty installation, repair, or maintenance by anyone other than Apple or an Apple Authorized Service Provider),
I think the part where if you transfer the Apple Care it has to be with the equipment that the Apple Care was sold with...in other words I don't think you can buy it off eBay and have them honor it unless you bought the computer off ebay.
Where it stated that wear and tear on mechanical parts is not coverd would include the CD/DVD drive, hard drive, etc. It looks as if that stuff would not be covered unless they deem it was a defect in manufacturing and not just wear and tear.
Just my thoughts though.
Here is the informationdirectly from Apple.com on the AppleCare program
For the period stated in your Plans Certificate/Confirmation or Proof of Coverage document, Apple (i) covers defects in materials and workmanship for the Apple-branded product(s) (Covered Equipment) listed on the Plan Certificate/Confirmation or Proof of Coverage document,
During the Plans term:
Apple, at its option, will repair or replace the Covered Equipment if necessary because of any existing defect in materials or workmanship, subject to the conditions in this section.
Apple will provide both parts and labor, but may direct that you replace certain readily installable parts yourself, as described below.
Apple may use either new or refurbished replacement parts to repair the Covered Equipment. At Apples sole discretion, Apple may replace the Covered Equipment with equipment that is functionally equivalent, which may have been manufactured from new, refurbished, or serviceable used parts. Any replaced parts or Covered Equipment will become Apples property.
The Plan does not cover:
Damage due to accident, abuse, neglect, misuse (including faulty installation, repair, or maintenance by anyone other than Apple or an Apple Authorized Service Provider), unauthorized modification, improper environment (including lack of proper temperature or humidity), unusual physical or electrical stress or interference, failure or fluctuation of electrical power, lightning, static electricity, fire, or acts of God;
Problems caused by a device that is not the Covered Equipment, including equipment that is not Apple-branded, whether or not purchased at the same time as the Covered Equipment;
Repair, replacement, or maintenance of items that have been subject to wear and tear, such as cases, key caps, knobs, handles, batteries or mechanical parts.
Transfer of Plan
You may transfer this Plan to a new owner of the Covered Equipment. If you purchased the Plan in the U.S. or Canada, transfer by sending written notice to AppleCare Administration, P.O. Box 149125, Austin, TX 78714-9125, U.S. You must provide the Plans enrollment or agreement number, the serial numbers of the Covered Equipment being transferred, proof of purchase of the Plan, and the name and address of the new owner.
This Plan is not available for Florida consumers or where prohibited by law.