After having been through quite an episode with some bad hardware causing other bad hardware, I had the pleasure of dealing with the Seagate RMA department for warranty repair.
My drives were about 2 years old and the process was incredibly simple. Put in a serial number, a model number, box it up and go.
The only cost was shipping it to them. They paid for the return shipping of my refurbished drive and shipped on the day my bad drive was received.
While filling out the online warranty repair forms, I received a notice asking if I'd prefer to upgrade my drive instead. The upgrade cost was $99.00 for a 500GB Refurbished SATA2 drive. The price was the same for both my 400GB and 300GB drive, both of which were also SATA2. Interestingly, at the time of the replacement, NewEgg was selling brand new OEM 500GB SATA2 drives for the same price, so this upgrade was less an upgrade and more of an upsell.
I had a dead 400GB from another PC, along with a 300 and 400GB drive from the HTPC and in both cases the 400GB drives were replaced with 500GB drives despite my not choosing to spend $99.00 on an upgrade. Your results may vary.
For those of you wondering if it's worth the $20 bucks for a cross ship, I can't tell you. I chose the standard replacement method. I shipped three drives USPS Priority, they arrived at the Texas facility within 3 business days and replacements were sent back UPS Ground, arriving back at my house (which is a max of 5 days depending on where you live).
Not a bad turn around. They're either really quick at identifying bad drives, or they don't bother checking. Considering they probably sell a lot of $99.00 upgrades, I'm guessing they don't put a lot of time into validating whether or not the drive they received is actually dead, though there's really no point in returning a good drive since the warranty on the refurbs is 90 days or the end of your warranty period on the drive you sent in, whichever is later.