I had a Rio portable music player and it broke after I had it for about 4 months. My warranty on the Rio was for parts and labor for 3 months and 1 year for parts only. I figured that it would cost me too much to get it repair so I threw it away. Now there is a site for broken iPods, iPod ResQ. Looks like you can get $35 – $95 dollars per iPod.
Another route for getting money out of your broken iPod is to sell it on eBay.