Let's face it, extended warranties are high profit items for the companies that offer them (either the manufactures or the after market vendors). My rule of thumb is that somebody is making money off these things, and it isn't me. Therefore, for the most part, I avoid extended warranties like the plague. I have never before purchased an extended warranty for a desktop computer (or a car, or an appliance for that matter) and have never regretted it.
On the other hand, I believe all of the people who have responded to this thread (and other related forum topics) with examples of how their extended warranty saved them far more than the cost of the coverage. I also feel that portable computers are subject to far more extreme environmental conditions than their desktop counterparts (just try carrying your desktop system around, jostling it about in luggage, using it outdoors, etc.) and have tougher temperature requirements (dissipating power supply and CPU energy over a smaller volume). Therefore, I have abandoned my usual behavior and purchased the 3-year warranty extension for my new PB.
As a couple of people have mentioned, you do not have to purchase the Apple protection plan from Apple. Ebay is one option, but I found mine for $253.00 by using CNET and saved myself nearly $100.00 for the exact Apple warranty product (Apple P/N M8853LL/A).
Just my two cents.