Two years ago I bought a refurbished 40 GB 4th generation iPod directly from Apple. At the time it was an excellent deal and it came with both Firewire and USB cables, a dock and a power adapter for $259. Even though it was older technology, my daughter's experience with her 5G iPod Video made me think twice, and I opted for what I thought would have been a more durable unit.
Well, it didn't make it to its 2nd birthday. Shortly after my return from Italy, I got the dreaded exclamation mark folder and while I could reset and restore the unit, it would start to click and whir like a skipping record and the exclamation mark folder re-appeared. Considering I am not a heavy user, I was pretty disappointed. And of course Apple priced the repair well above replacement cost.
Since I bought it on my Visa card, I availed myself of the purchase protection insurance, made the claim, and yesterday I received my cheque from the bank.
I replaced it with an 80 GB iPod Classic with a colour screen and the new interface (cover flow is quite nice and having my iPhoto library was a bonus) for $20 less than I paid two years ago for the old one. The new unit is less than half the thickness of the old, and gives the impression of being quite solid with its all-metal case.
It will be interesting to see how long this one lasts. Hopefully it will crap out before two years, and purchase protection insurance will replace it with an 64 GB solid state drive iPod touch...

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