I decided to buy an extended warranty from the dealer that sold me the car, but only after negotiating a price way below their initial offer. I found a competitive price on the Internet for the 8 year, 100,000 mile, no deductible warranty and asked my dealer to match it. Even if I never have occasion to use the warranty, I think of it as an insurance policy that will enhance the value of the car when I sell it 4 or 5 years from now.
I would add that you do not need to negotiate the price of the warranty while you're buying the car. You can just decline their offer when you're doing the financial paperwork and call them back later.