YoDude, if, when I gave them the device, they inspected it and agreed it was perfectly within warranty before accepting the package, then I would presume that they would be the cause of any damage caused between them receiving it and delivering it to nokia. Whether or not they'll accept responsibility though, is debatible.

If I broke it before giving to UPS, or better yet if I were the one that chose the carrier to use for the warranty service, I would still be upset, but would accept any responsibility for damages that happened during the shipping process, however Nokia is the one that gave me specific instructions to use Nokia, and they are the ones that gave me the mailing label. This would be an entirely different matter if I decided to put my phone in a USPS envelop and shoved it in a mail box.

Edit:
The idea of me having to pay 100+ dollars to ensure that UPS doesn't break my phone during a FREE repair is rediculous. Had I paid that money, UPS might have taken responsibility, but i would still be out of 100 dollars, and I would still have a phone that was presumably out of warranty. Not a wise investment in my honest opinion