Last night, the AppleCare phone rep assured me that Apple would replace or repair my iPhone free under AppleCare. At rubber vs. road time, however, the Apple "Genius" showed his sad face and explained that AppleCare only covers defects in manufacture (which would make it useless, as you'll almost always find those within the 90-day warranty). My (second) replacement iPhone cost me $249 + tax (why do they charge tax for a service replacement??), or $279 today.

I also got a rubber shell to protect the iPhone, since I obviously can't depend on AppleCare for any repairs in the future.

Unfortunately, all these protective wrappers make the iPhone larger (and less pretty). This wouldn't matter so much if Steve Jobs hadn't sold the svelte elegance of the iPhone so heavily. So the three iPhone holsters I bought (all problematic for one reason or another) won't fit, and nobody should use them, since iPhones really need full-time protection (meaning a sleeve or hard case). I'll stick with my $5 Treo (650) case, which is large enough for 2 iPhones, or one iPhone in an incase sleeve.

Regarding Apple Support: It's nice to have good things to say, I am now a sad panda.