Slightly off topic but I use to work in Geek Squad, and let me tell you, not buying the protection plan for any system or item is fairly silly. People use to come in all the time with broken shit (iPods, cameras, PC's, printers, PS2's, TV's, vacuum cleaners, ect.) and always got pissed off when I told them they had to pay if they wanted me to do anything for them because they didn't bother buying any kind of waranties.
Also, buy buy warranties on MP3 players, especially iPods. All of those break all the time and you'll save yourself a fair amount of grief.
Depends how you treat your stuff. Never regretted not having it... By the time something breaks, half the time I wouldn't remember where I purchased it from anyways. lol
No matter how you treat your stuff, stuff breaks. I treat my things like they were made of some kind of precious plastic and things still break over time (I have one those uber Dyson vacuums and it has had to go in for repairs twice actually). Luckily, I know better and my shit is covered.
Paying for insurance on every piece of electronics you own is a huge waste of money. Insurance is designed to benefit the insurer not the insuree thus, over time it doesnt pay off which is why insurers are so succesful. They put fear into people and you are just playing into it. For every person you saw with a broken part there were 97 other people who didnt have a problem. What about those 97 people? If they baught those overpriced insurance policies then they got ripped off. Like other have said, only pay for a warranty on an item that is out of your normal affordability range. For most folks that should be in the $1k or over range.