I can verify that it's $313 total at Best Buy (TX) with the 2 year service plan. They told me the battery is covered but I think they're full of it because I looked at the warranty and it says batteries are covered only for laptops. Someone mentioned Applecare gets you 1 free battery replacement.
However, since the battery on the iPod is not external or easily replaceable, you could claim it's broken. BB is very good about replacing batteries on laptops. I've had to bring in two different laptops that wouldn't hold a charge and they did minimal testing before they gave me a new battery.
With BB, unless they send the warranty repair to Apple, they would seem to be a lot less knowledgeable about repairing the iPod and would probably just refund the purchase price of the iPod + tax (that's what the warranty gets you) which after a year or two, you could replace with a 2G mini.
If I were you, I'd ask BB if the battery is covered and get it in writing if they say it is. I'm going back to confirm it with them since the info I have may be out of date.