after numerous complains regarding its vicious "water-damaged" policy (where apple has refused to honour the warranty), apple has come up with some modified terms in regards to this. mind you, that this information is only applicable to australian bound units (and more of a great reason to keep your iPhone within contract, instead of being a cheapskate to forfeit it)
taken from
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My iPhone is not eligible for warranty service. What are my service options?
Apple offers two service options for iPhones that are not eligible for warranty service.
a. iPhone Out-of-Warranty Battery Replacement Program
If your iPhone requires service only because the battery's ability to hold an electrical charge has diminished, Apple will replace your battery for a service fee. For more details, please refer to the iPhone Out-of-Warranty Battery Replacement Program Frequently Asked Questions, or contact your carrier: Optus, Telstra, or Vodafone.
b. Out-of-Warranty Service
If you own an iPhone that is ineligible for warranty service but is eligible for Out-of-Warranty (OOW) Service, Apple will replace your iPhone with a new or refurbished iPhone for the Out-of-Warranty Service fee listed below.
You can also contact your carrier for out of warranty service: Optus, Telstra, or Vodafone.
iPhone 3G Out-of-Warranty Service
8GB $268.95
16GB $268.95
All fees in Australian Dollars and include GST and Shipping and Handling.
For example, an iPhone that has failed due to damage or liquid damage is eligible for Out-of-Warranty service. However, certain damage is ineligible for OOW service, including catastrophic damage, such as the device separating into multiple pieces, and inoperability caused by unauthorized modifications.
Apple reserves the right to determine whether or not your iPhone is eligible for Out-of-Warranty service. Please see Apple's Repair Terms And Conditions for further details.
therefore in a gist, if your iPhone 3G is out of warranty, damage or liquid damaged, you can simply pay AUD$268.95 (both 8GB and 16GB; weird i know - same price for two different capacity) for a refurbished unit (and even a chance for a brand new one if luck is on your side)
Added on May 16, 2009, 1:40 amtechnically, countries (can someone working for maxis or local apple resellers confirm this?) in which apple provides such a service will have a greater value to the iPhone.
hence should the buyer of your iPhone (or yourself) run into damages as quoted above (with the exceptions of catastrophic damage, such as the device separating into multiple pieces, and inoperability caused by unauthorised modifications), you just simply top up a fraction of the cost for a brand new unit!
again as quoted above (
my own speculation), i doubt the network provider will honour such services if you have decided to forfeit your contract and run thousands in bills.
This post has been edited by nokia2003: May 16 2009, 01:51 AM 
May 15 2009, 08:55 PM
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Need help/advice from Iphone Experts. 
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