The warranty is slightly different.
If they can repair it, they will, exactly as per a brand new one.
However, if it cannot be repaired, they will only replace it with another refurb. If there isn't a refurb available, they won't replace it with a new one, they will only refund you the original price paid, leaving you to make up the difference to buy a new one (though see below).
This happened to me with a Time Capsule. No big deal - the refurb was £210, a new one £250, so it was only £40 difference to pay. (In my case, Apple gave me a £20 credit as a goodwill gesture, so I only needed to pay £20 myself. Not sure how common this is, though, so I wouldn't count on it.)
So, worst-case, you'll eventually end up paying the new price. So long as you can afford this, no worries. Just don't stretch your budget to the max to buy a refurb.