I recently bought a 160GB ipod classic at the Reno, Nevada store. When I opened it, I noticed a flaw on the headphones at the seperator piece. I immediately took the earphones back to the store and was told to make an appointment with an "tech genious." This appointment was for three hours later. When I told the greeter that that was unacceptable, he sent me to a manager who picked at the flaw and peeled away the rubber casing. He showed his manager and I was told that Apple doesn't cover product abuse and that I had "peeled away the covering." After explaining that these are brand new and haven't been used I was told that there was nothing they could do. After getting upset, the manager brought me a new set and said this is the only courtesy exchange that will be given for my ipod.
The Apple Store: Bad Customer Service at Your Local Mall