I NEVER buy warranties because they are usually never worth it. Usually the appliance/electronic breaks down after the warranty ends and rarely breaks down during the warranty period. However, I have found a very worth while warranty to buy:
2 1/2 Years ago I bought this Banzai Water Slide at Toys R Us. It was $399 on sale for $299 and I paid $281 after some birthday coupons. The day after I bought it a coupon came out for 20% off water slides and Toys R Us refunded me the coupon amount making the total $221. After reading many reviews I decided to buy a 3 year warranty for $79 (water slides don't last longer than 2 years according to reviews). It is now 2 1/2 years later and after my 13 yr. old son and his friends played on it really roughly, the seams ripped apart. I called Toys R Us and they promptly mailed me a gift card in the amount of $439. Now if you are keeping track, the total amount I paid for the water slide with the warranty was $300, but they sent me the full price amount (I don't know if this was a mistake, or policy). Now I can buy a new water slide for free and I will be buying the 3 year warranty with it again. I imagine I can keep buying new water slides every couple of years without spending a cent.
*Make sure you get on the Toys R Us mailing list because they randomly send out great coupons. I am on the mailing list, but I did not get the 20% off coupon when I wanted to buy a swing set and had to buy my coupon on ebay (I paid $15 for it). It was so worth buying it because it saved me $60 on my swing set that was already on sale. It is also worth signing up on their email list. That is where I got my 20% off a water slide coupon.