You can cancel Applecare within 30 days in most states (definitely in Calif). They don't transfer it, it stays with the phone. If you've used any portion of it (to repair a phone, say), that is deducted.
You should call Apple today to make sure of the date you must return the phone. If you purchased from Apple.com as many did at launch, not all stores will accept it as a return. I was told my store would by the manager and then when I got there, the manager wasn't there. So they acted as a shipping point.
The whole process took a long time and then I had to go to ATT to get a sim card because the Apple store would not give me one (even though ATT told me that the Apple store would).
The phone must be received by or before your last day.