My home insurance company offers a rider for electronics damage - about $19/year, and it paid $50 out of the $100 to fix my Nexus One when it fell. It's Liberty Mutual, but I think all the big insurers have a similar deal.
Yes, SquareTrade.
SquareTrade is great for iPhones - $99 for two years with a $50 deductible. But for other smartphones, it's $125 for two years with a $99 deductible. For the 8GB, it would just be cheaper to buy a new one.