1 month out of warranty...my phone needs to be replaced...Screen problems

My phone is one month out of warranty and the friendly and polite person at
theapple store informed me that it would cost more to repair my phone than get a new one...I am very dissapointed that an Apple product only lasts one year.
For no appearant reason,a couple times a day it scrambles
into a colored mess and shut off the phone. It usually takes several tries to shut off and reset the phone before it works again. The guy at the apple store suggested it was a bad video card or something and it would cost apx $200 to repair or about the same to buy a new one. After speaking to ATT this would change my rate plan to a higher cost and I would lose over 5000 rollever minutes. I am stuck in a bad spot and quite frankly it leaves me with a poor impression of apple products. Im not sure I want to spend the money to get another phone that will fall apart a month after the warranty ends.
anyone have a similar problem or suggestions??

Apple doesn't have a menu of repair services.
For an 8GB first generation iPhone, the "repair" cost is $199, which pays for an exchange.
I have always used Macs for personal use. I have a TiBook (laptop) purchased in the spring of 2002 which is still going strong, and my primary computer is a 17" PowerBook that is approaching 3 years old with no problems. Since I prefer a laptop which is transported on occasion - more often in the past, I usually purchase the AppleCare extended warranty to extend the standard one year warranty by an additional 2 years, which I didn't have to use with my TiBook, and I haven't had to use with my 17" PowerBook either.
I purchased a first generation iPhone on the release date and I was using it up until purchasing the iPhone 3G a month or so after the release date with no problems. This is unfortunate, but it can happen, as it can happen with any computer brand or smart phone brand.
I don't understand why purchasing an iPhone 3G would force you to change your current calling plan with AT&T and lose your rollover minutes. When I purchased the iPhone 3G, the calling plan I had with my first generation iPhone transferred to the iPhone 3G and I didn't lose any rollover minutes.

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