The reason I am bringing this up is because my iPod touch screen broke on earlier this week! One second it was fine and the next... gray lines running horizontally across the screen :- / And it was only getting worse. The next morning it had a yellow blob thing on top of one of the lines! Look:
There was also a thick gray line on the bottom but I don't think you can see it very well in these pictures...
The FIRST thing I thought of when I saw this was: WARRANTY. All apple products have a one-year factory warranty and I knew that I bought my 'touch' about a year ago. I found the receipt and sure enough... one week left till my warranty expired! MAN, I got lucky.
I brought my sick iPod to the genius bar the next day and got a BRAND NEW ONE! Yay! Moral of the story here: Apple rocks : )