I bought my laptop in August 1999. I was pretty kind to it, but some stuff was beyond my control (e.g., it was in a car accident and got some cosmetic damage). That happened within the first year. No hardware failures whatsoever. In late 2001 the AC slot in the back became extremely intermittent and would not allow the computer to work essentially. I sent it in, they replaced the motherboard for free, took about 4 days for it to happen. List price was over a thousand dollars for the motherboard alone. Shortly afterward, the DVD drive stopped working. I had to take it to germany for my studies though, so I put in a different drive and skipped town. A few months after that the keyboard stopped working. I didn't get any failures in the first two years of operation, but I got a lot in the third year.
To sum it up: I would always always always go for a three year warranty. I wouldn't bother with a fourth since you'll probably replace it by then, as I'm looking to do with my laptop now.