I went in today with an appointment to drop the phone off and get the loaner. It was anything but a smooth experience as I was there for almost two hours. No fault of the staff as they had not had proper training on this. Most of the time was spent waiting for them to figure out the procedure. There were about 7-8 customers waiting at a table and 4-5 Geniuses all working on getting it going. Before they started, they offer an upgrade to a 5S for $299 with no contract extension but you still have to give them your old 5.
I can address some of the questions posted here...
If the phone is under warranty, they will replace the phone with a refurb. Those people were in-and-out like normal. If you're iout of warranty, you have to take the loaner phone and send yours in (or buy the $299 5S).
If your phone is jailbroken, then this won't work for you. The first thing they do is have you turn off Find my iPhone and they do an Erase All Content & Settings (which won't work if jailbroken). Then they hook it up to their laptop and run a diagnostic utility, and test the button. Basically your phone will need to be restored when it gets sent back.
All the loaner phones are black 16GB ones and are in pretty rough shape. They said they didn't know where they came from but they're not the regular white box refurbs. Mine is pretty scuffed up. The loaner came with a white box with an orange sticker which was designated to go to the repair depot.