Its based on tests and presenting symptoms
On a general note:
What will probably happen in my case is i'll buy AppleCare when my 1 yr warranty is almost up in fall next year, as i want to avoid buying a new machine till Rev B of Nehalem laptops start shipping. In other words, i intend to buy a Display, AppleCare & keyboard and just keep this for a year or two depending on how fast Apple lets loose Nehalem laptops. If it breaks within this timeframe i'll just drop it off and get it fixed
In the meantime...knock on wood its working fine
But they said "not in the faulty batch" -- if they can say that, they should be able to tell us explicitly which ones ARE in the faulty batch. Unless they're transparent about this, I will continue to assume that all these are defective and might fail prematurely.