I generally don't buy extended warranties on things just because the math doesn't work out on average. On most extended warranties, about 78% of your payment goes to overhead/commission. On average, companies use only 12-15% of extended warranty fees to actually cover repairs. I forget where the other 7-10% goes on average.

Of course, if you are the one guy whose transmission hits the pavement, it was worth it. It's ultimately up to you, but generally the math doesn't work out. You can usually self-insure things like that for 20 cents on the dollar.