Apple Memo Reveals Dead Pixel Policy

"Our friends at Boy Genius Report gave the lowdown Wednesday on an internal Apple document that specifies exactly how many bad pixels must appear on a device before it is considered to be 'out of spec.' There are a number of thresholds that depend on the display size and the density of the anomalies. For displays up to 3.5 inches, which includes all iPods and iPhones, no bad pixels will be tolerated; even a single instance gets you an automatic replacement. "

Apparently, this is just a recommendation to Genius Bar employees on when a display (or a device with an LCD display) can be replaced due to dead pixels.  The interesting thing is:  If you have dead pixels on a largish screen, you can get it replaced, no matter how many dead pixels it has, but if you get a replacement with more dead pixels, you can't replace it for free again as long as the number of dead pixels are within spec.  Has anyone come across this policy at their local genius bar?