Apple Care Protection Plan for Ipod Nano?

I am looking to buy a new Ipod Nano 8GB from Apple.com. The warrantly plan they offer is good for two years and costs $39. I have a 1st gen nano that I've used for two years now and has lost its ability to hold a charge. I've decided to buy a new ipod instead of replace battery on this one because 2gb is just not enough space for me any longer. Two questions:

1. Can I use the 2 yr protection plan to replace the battery on the new ipod nano, say in 23 months? If so, it is clearly worth the $39. But, I wonder if there is some limitation to the warranty that requires the battery to be very limited in its charge ability before they will replace it. Any experience or knowlege about this warranty program?

2. I believe it is $79 to replace the battery on my 1st gen nano through apple. Should I have the battery replaced and then try and sell it or perhaps give it to a family member as a gift? In essence I am asking, is it worth the $79 to replace a battery in old equipment?

Tad V is right. Apple is a super great company to work with. However, when it comes to the battery life, they don't seem to budge. You have a really old iPod Nano and batteries will fade to nothing over time. This is the case with ALL battery operated devices. I would not suggest replacing the old battery for $79. I would just purchase the new iPod nano and make sure you buy the Apple Care for it as well. The newer ones were designed better then the ones from years ago so you might notice better battery performance.

Totally buy the new Ipod.They are really nice,and the warranty is worth EVERY penny. Apple is generally a super great company to work with,so if you have the warranty,usually all you have to do is tell them,and they will fix anything that is wrong,or send you a new one.