Are you sure they didn't mean £130-150 to repair as their is a flat rate fee of £139 for iPhone repairs or £69 for the iPhone battery.
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Last time I had a problem with an Apple product I had to print something out from the Apple site stating what I was saying before they believed me so make sure you know/have some proof that is has happened with other people!
Let us know how it goes, i have a similar crack on my [out of warranty] iPhone and would love a new one for free!
that's a bugger as mine is the same but goes up about 2cm. Was hoping for a nice new 3g to give to the Mrs when the next iphone comes out.
I have o2 insurance and my iphone has a inch crack from the connector could i phone up and have it replaced?
Thats not good news