Buy the service agreement. You never know. If you are a student or educator, you can get a pretty significant discount on the service agreement.
I am very very very careful with my 30 G photo. I use a belt clip, have a good hard case, etc.. But last week, while I was walking, the Ipod somehow fell out of the pocket it was clipped to and fell on the sidewalk.
Then the screen went blank! A lock icon finally came up on the screen but the lock button on top was set to OFF. I couldn't load turn on or anything.
If I didn't buy the service agreement in June when I bought my Ipod I would have been SOL. Since I had the agreement, they were able to fix it no questions asked.