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Since 80% of reported failures are from Accidents, ST gives you the protection that you really need for your iPhone, including coverage from drops, spills and other accidents.

2 years of coverage from Drops & Spills as well as extending coverage for mechanical / electrical failures for the 2nd year. Coverage Details
Smart customers research before they buy. Why buy a warranty if you don't know what kind of service you'll get?
Find thousands of 5-star customer reviews (and a few less flattering ones) who have claimed on their warranty on sites like Epinions & NexTag.
"I LOVE SquareTrade Inc. Great customer service! Easy, Easy Easy, Painless process! ...The turn around time was so quick and you can easily track your claim on-line." - ohnopancakes, June 18, 2008.
Price depends on model & length of coverage:

Prices are based on the maximum replacement costs of the iPhone models: $399 for an 8gb model and $499 for the $16gb model. You will see these values listed as the “item price” on the checkout page and on your purchase summary email.
*Coverage is only available in the first 30 days after the date of purchase, as indicated on the receipt.
SquareTrade is an independent warranty company, and is not affiliated in any way with Apple, Inc. iPhone and AppleCare are registered trademarks of Apple, Inc.
The SquareTrade iPhone warranty prices listed above are applicable to new iPhone 3G models purchased from authorized iPhone outlets. Other iPhones (including those purchased on eBay) may be eligible for SquareTrade coverage by going through our quote tool on our homepage at http://www.squaretrade.com. The same coverage options may not be available for iPhones.
Please note that unlocked iPhones are not eligible for coverage from SquareTrade. Unlocking an iPhone after purchase will void a SquareTrade warranty.