I recently used my PRP on my 1yo RROD'd 360...
Returning it was no hassle. I did it by mail, but you can go to the store. I asked about the DLC, they told me to just keep the HDD. I wished I would have kept the component cables as well, but...
I got a gift card for the orig purchase price. With the funds I bought an arcade and, a couple games, and a $40 new PRP (where its $60 on the pro, $80 on elite)
I asked the agent at the store about the rest of my warr (before I decided on the arcade) and was told that the PRP no longer applies as the SKU changed, as they now have HDMI ports and the 2 games. I was told if the SKU didn't change the PRP would have con't. I tried to argue a discount for the lost year of the PRP, as I could care for the games or the HDMI, but no dice. This is what the agent said, but YMMV, as this is a BB employee we are talking about.
Overall it worked out great for me w/ the price drops, new falcon boards, the HDMI, and the new games I got out of it (inc several good arcade games, Boom boom rocket is awesome) as well as a 256mem card and 2 more yrs under the PRP. W/ the elite its not so good unless you wanted to dye an arcade black lol