Can't fault Apple's customer service at all. I started developing some 'bubbles' under the screen on my 2G iPhone, which started to grow in number over about two months.
Went into Apple at the Bull Ring, sat at the Genius Bar for about 15 minutes waiting to get served, the guy looked at the phone for about 5 minutes, checked the moisture sensors, and pretty much just handed me a replacement iPhone 2G. The entire process took about 30 minutes max, and most of that time he was dealing with the other customers at the hectic Genius Bar.
Brilliant service!