Having just had two seagate drives fail recently (a 750GB DB35 with an electrical failure as reported by smartctl) and a 750GB 7200.10(?) with a broken SATA connector, I recently got to experience their return policy.
I had to ship Seagate the drives FIRST, then they ship the replacements. They would cross-ship for an additional $20. I thought this was okay, if not ideal.
They did have elaborate packaging recommendations, but I wrapped the drives in bubble wrap (the same packing material newegg sent me drives in), put 'em in a box with anti-static peanuts, and sent the package via insured priority mail. The $200 insurance cost me $1.30 or something. I think I paid about $20 total for the package containing both drives.
I was promptly notified when my RMA package arrived at seagate, and replacement drives shipped the day after that with a tracking number sent via email.
They even claim to have an 'upgrade' option, where if your old 300GB drive dies, you can pay some marginal cost and have them replace it with a new model. That option was greyed out for me-- I guess my drives were too new.
All in all, I was satisfied with the return procedure.
What I'm entirely unsatisfied with is their firmware upgrade policy. I have several affected 1.5TB seagate drives, and I cannot fathom why I must contact their tech support in order to get the correct firmware. Why isn't there an auto-magic upgrade program? (Or, having not RTFA, is that what this new program is?)