John Gruber of Daring Fireball had a defective review unit:
If even the review units (which are presumably tested before they're handed out) are displaying hardware defects, that doesn't bode well for the actual retail units.
The first unit I received from Apple seemingly had a hardware defect. Taps worked at first, but I found them surprisingly weak so weak they were easy to miss, even with the watch strapped relatively snugly to my wrist. By the end of the first day, taps werent working at all. Apple sent me a replacement unit the next day...
If even the review units (which are presumably tested before they're handed out) are displaying hardware defects, that doesn't bode well for the actual retail units.