I have bought a few desktops and probably around 20 laptops over the years for myself, famiiy and friends. The Applecares I got for them have been used only three or four times (keyboard cosmetics and battery not up to par the usual culprits), and I am not sure that more than one of them has actually been repaired under the extended portion of warranty. I think I had issues with my Powerbook 170 backlight a few times. There was one 15" G4 powerbook that had recurrent issues with its power port and related internal connections or clearances or something; Apple judged them non-abusive problems and fixed them under warranty.
In my opinion, having the extended coverage on a laptop (or desktop with display) is worth every dime when the need kicks in. Electronic circuits, their encasements and connectors can decay sooner than their expected lifetime, and they can be amazingly expensive to repair or replace. This is because an assembly line process is one thing, and a diagnostic process involving a sold, shipped machine that has also endured at least partly undocumented usage is more open-ended and therefore more complex.
Having a display suddenly decide to go south early under light usage should make one a believer. I just figure the extended coverage is a necessary component of my order, and I don't begrudge the expense. Nothing manufactured is perfect off the line 100% of the time, and no machine or human being charged with quality control is perfect 100% of the time either. If Apple did not offer extended warranties, and if some of those did not go unused, the expense of everyone's repair of anything would be more expensive. There are people to whom such a rationale is deeply offensive, I realize that. So for them I say this: don't buy the warranty, and then don't come here complaining when your display fractures on an otherwise sunny morning in your bedroom, 13 months after some forklift set a pallet down a little hard somewhere in China.
And yes, it's true that your display can fracture or your logic board go south one day after the warranty goes. It happens. Be nice, maybe Apple will be nice back to you. Life is not fair, never was, never will be. Satisfaction, on the other hand, can often be negotiated.
Again speaking personally, not having had to deploy the warranty coverage very many times does speak well for the quality of the Apple designs and implementations. With iPods, I get Applecare on the ones with large hard drives, and for the iPod touch and iPhone devices. I got one for the iPad. I am trying to think if I ever called on extended warranty coverage for an iPod. I think not. Maybe not even original warranty coverage, except for my iPhone 3GS which I bought refurb from AT&T and which arrived with dead sensors down the right hand edge of the display. Apple replaced that one for me entirely.
My own rule for the less expensive flash-based iPods is to buy the warranties for the first couple that I buy of a new model, particularly if they are gifts, and after that maybe not. Like the latest little nano, the square one, I bought the warranty but it's been totally trouble-free so probably I will not get the Applecare on the next ones I get for gifts.
Bottom line, for me if the thing has a hard drive in it or costs more than $500, I will continue to shell out for the warranty because fixing it without coverage after one year might prove prohibitively expensive. That would make the thing only worth trading away as whatever's left of its functional parts, which is too bad when you think about it as an Apple laptop less than three years old or an ipod touch less than two years old. My laptops usually get used by someone for six or seven years so they are worth covering for three. The iPod touches seem to last forever if they are not dunked or smashed caseless onto a tile floor, so they are certainly worth covering for two years instead of one. IMHO
