I went for the one year since I'm hoping a new version with more memory, etc... will come out sometime within a couple of years. I only bought the warrantee since this is a new product which I will be carrying in my pockets, so it will see some stress. Normally, I don't get extended warrantees of any kind, since your basically betting the store that the thing you just bought is a bigger piece of junk than they think it is.
They make a lot of money off adding 10% to the price tag since the failure rate in the first year for something from nokia should be a lot less than 10% - which is why salespeople call it "the cheese".