Apple has expanded the services offered by its retail stores to include fixing damaged iPhone screens.

[ad#Google Adsense 300×250 in story]The Loop has confirmed that if your iPhone has a broken screen and you take it to an Apple retail relocation, they have the capability to fix it on the spot. The machine (think big suction cup), which is located out of customer view in the back of the store, reportedly separates the iPhone from the screen, allowing a new one to be installed.

Of course, your screen doesn’t have to be completely smashed to need some sort of replacement done. Some users have reported dust particles on the inside of the screen as well.

All three models of the iPhone can have there screens replaced at a store under this program. Unfortunately, due to the way they are built, iPod touch screens cannot be replaced.

If your phone is under warranty and the screen needs to be replaced due a defect with the device, there is no cost to have the screen replaced at a retail store. However, if it’s not a warranty issue, the cost of having the screen replaced is $199.

The displays are the only warranty work being done in the retail stores these days. The stores also have to ability to fix or replace damaged audio components in the iPhone.

Of course, allowing its retail staff to fix minor issues in the store cuts down on the amount of time customers are potentially without their iPhones. That makes for some happy customers.

If you decide you’d like to tackle the problem yourself, you can always follow Jeff Carlson’s DIY guide over at TidBITS.

Update: Added link to TidBITS article. 12:00 p.m. PT 7/2/09

Update 2: Included information about the iPod touch and warranty pricing. 2:16 p.m. PT 7/2/09