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What would you do?

We have a nice Canon Powershot SD550. It is barely a year old and we have taken thousands and thousands of pictures with it. One of the kids slammed it on a table on our last vacation and the LCD stopped working.

Sending it back to Canon for repair yielded a $127 repair bill. A new camera (same model) costs about $320. What do you do? What is the cutoff for just saying screw it and buying a new one?

For us, we struggled over it for a long time and decided to just fix it. If the problem was caused by a defect I would have a hard time paying to have it repaired, but since it was caused by my break everything we touch children it made sense to just pay it.