Warranty - how does it work?

after 5 happy years with Creative Zen, I've switched religion, and got an ipod Classic 120GB. sadly, 3 weeks after loading it up, the screen failed (no display, just went white and didn't work properly). reset and a restore didn't make any difference.
apple were most helpful on the phone, and said to get it a Service Centre. The service centre (not an Apple store) has agreed it's faulty and are awaiting parts from Apple. What I'm concerned about is that they're saying that it will most likely be replaced by a refurbished model - which doesn't sound quite as good as a new one... is this right?
the original was purchased as a gift for me from Amazon

The service centre (not an Apple store) has agreed it's faulty and are awaiting parts from Apple.
iPods that need parts replaced are returned to Apple for repair. They are not repaired at an Apple Service center or Apple Store.
What I'm concerned about is that they're saying that it will most likely be replaced by a refurbished model - which doesn't sound quite as good as a new one... is this right?
If it needs repair (parts replaced, not simply a Restore or something they can do in the store), it gets replaced with a refurbished iPod of the same model/size/color.
All refurbished iPods meet full factory specs, new battery, new case

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