I just wanted to share my iPhone 3g water damage experience. I woke up the other morning to find the glass of water I 'foolishly' left next to my iPhone/alarm clock had been knocked over. I have a case on my iPhone and it was working fine so I assumed the extent of the water was superficial. Hours later I got a few iPhone accessory messages but thought little of it. Everything seemed a little slower too. But later that day I discovered my camera not working.* I looked up the info on water damage and my dock indicator was red but my headphone Jack indiciator was white. I carefully pried my phone open and the inside indicators were white. Other than the mornings accident my phone has been nowhere near water so I really didn't think I should be excluded. Besides my phone is my lifeline and I could not afford a replacement. So I did what many will call "wrong" and cut a very small piece of paper to cover the bottom sensor just by kinda placing it in there with no adhesive. So I got to the apple store right before close and explained that my camera had stopped working but everything else was fine (mostly true). First thing he did was inspect my water sensors. he even took a can of air to the docking connector, but then told me everything was ok and I could exchange it. But the second genius I talked to at the bar looked and apparently saw red. He explained how the warranty was void and figuring I was at a loss wanted to look into a refund of my AppleCare, which had not kicked in.* After a little respectful protest to the situation, he explained to me that the indicators were not actually the determining factors as to replace it or not, but the actual sensors on the inside of the case, which he was confident would be triggered if the indicators were tripped. Knowing my internal sensors were spotless, I asked if they could check them. He took it in the back and several minutes later he walked out slightly confused but with good news: I still qualified for an exchange. he mentioned he had never seen this before, and promptly exchanged my iPhone. I suppose my message is, in case of red sensor syndrome, you might as well carefully open your iPhone to see the internal sensors. If they are white, carefully reassemble, sync your iPhone ( just a hindsight observation from an anxious iphoner) and take it in. Ask for an explanation (nicely) and ask if they can open it up to see if the insides are ok.* The 2 visible indicators are not the end of the line!!! I wish this article was around before my trip so I wouldn't be so nervous feeling like i was trying to scam when In reality I was still waranteed. Thanks to the apple store geniuses for giving me the oppertunity to prove myself correct.* Hope this helps!