Not true. A friend of mine had the I touch 2g had problems with it. Took it into an apple store. The store didn't have any I touch 2g. So the store gave him a upgrade to touch 3G for free because the warranty was still in use
Apple only do that for a couple of reasons:
1. High-worth customers with many product registrations on their account.
2. Items that have been repaired multiple times. (usually more than three, but the limit seems quite arbitrary)
3. Supply constraints that prevent getting a replacement in an acceptable time.
4. To make up for an error or problem on their part.