I talked to Erin today on the Nokia UK helpline, I was offered a refund or replacement (RMA)
Despite all the trouble and wasted time I like the device and especially the community so took the replacement option, god knows how long it will take to arrive though!
I sent my N900 for repair with the broken microphone problem as early adopters will be familiar with.
The microphone still does not work... FFS!
.
Well they mosy likely tested the device the way a hardware facility would...with diagnostic tools.... not by using it. So most likely the mic functions at an electronic level - but if you don't have software interfacing with the hardware properly you will have a "defective" mic. Investigate this as a software problem.