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For $500 you could have bought several laptop hard drives, and they
are generally even easier to install than in a desktop or tower
system. Did the extended warranty include data recovery, or just parts
& labor?

The $500 bought the better extended warranty plus it included a $200 rebate,
and 20% discount on the whole order. In addition it bumped the initial
purchase price of just the computer up to $2300 before any discounts which
qualified my purchase for an additional $200 discount for going past $2000
on the order.
Basically getting the big extended warranty got me a package deal that I was
going to spend extra money on any way. We got an 80 gig HD over the 40 gig
standard, DVD burner over the CD, wide screen display, 512 mem over 256,
Blue Tooth and the better of the 3 offered wirelesses options offered, 3
year virus protection, an Argus back pack that holds a ton of books if
wanted and the computer, an extra 50% larger lithium ion battery. XP pro, P4
processor, Centreno Technology, 4 years next business day repairs and
accidental breakage and all delivered free.

While that still may sound expensive we were able to get the computer and
all the extras delivered including tax for $1595. With out the extended 4
year contract that initially added $500, the computer would have been about
$1480 with the school discount. Pricing Compaq, HP, Fujitsu, Toshiba and
Sony, the closest competitor was HP at $1550 with a shorter extended
contract with less coverage, smaller HD, less memory, regular screen, and no
back pack.
I was going for the HP with less features and with a 3rd party warranty for
3 years with out accidental breakage until I found out about the school link
to Dell.

I used every scenario to try to get the price lower with out the 4 year
extended warranty, but when it qualified me for more discounts which got me
better features and ultimately only cost about $115 more it became a no
brainer. I went through the regular links to buy the computer from Dell and
the cost was $400 more for the exact same order. Going through the school
the total discount was $800, $400 more than not going through the school
link.

No, data recovery was included however he backs up to a flash drive and had
it all there to begin with. Reinstalling the OS and software took about 3
hours whether he did it or the technician did it. Dell walked him through
it.