I have Apple Care on my iPad 3' , my iPhone 4S, and my iMac.
It not only extends the warranty to 2 years, it includes accidental coverage and technical support for 2 years. Apple support is awesome.
I got a AirPort Extreme and when I called for help to get my crappy work laptop pc working I found out that since I have apple care on my iPad it was extended to include my airport extreme. (Same thing would have worked because of iMac)
As far as apple replacing them with a refurb unit, apples refubs are like new, new screen, etc. plus they have a new warranty.
I would avoid best buy warranties, and a square spec might be ok, but in the end with Apple care, I have seen apple cover some things hey shouldn't.