Ok, so I went into the store today. I get up to the counter, he takes it and walks to the back room and takes it apart, walks back in and hands me a new one for free and said they'd give me the benefit of the doubt. I didnt even tell him how it broke our how I dont know it happened because he probably knows the person would lie. So basically he's heard every story in the book. But ya, from what i hear, dont send ur ipod back to the apple company cuz they dont care about you. So if you ipod breaks, go to the store cuz they replace it even if you purposly bust it on the ground. However, I think you have to pay for it the second time you come in for abuse reasons. Well thats my story, thx for the help guys.
Just on a side note - don't just blame Apple for this. I think it's perfectly accetable business the way they handle things, and I think you'd find the same problem with anything else you tried to return regardless of the vendor/manufacturer.