Same exact thing happened to my wife's 2009 iMac last month. Luckily it was still covered by AppleCare for another 3 months. Talk about perfect timing. Apple fully replaced the LCD, new front LCD glass, new ODD and new HDD (apparently it was failing -- news to us!). Final bill was over $1500. We paid $0.
Traditional logic regarding extended warranties does not apply to AppleCare. AppleCare is always worth it for every product, IMO. It doesn't matter where you buy it, so if you're not a student then keep your eyes peeled for third-party Amazon sellers and eBay. I actually bought my wife's AppleCare on craigslist from someone who bought it years ago for her old Mac and forgot to activate the code.![]()
Right on! I always buy the Apple Care on my Mac's but only once on my iDevices - the original iPhone. So far I've not bought it on the 3GS, 4S or iPad (3rd gen).