Apple has back-tracked and agreed to extend warranties and issue credits to American consumers who had battery problems with older versions of its iPod.

The settlement potentially covers an estimated 2 million consumers who bought a first, second, or third generation iPod on or before May 31, 2004.

The settlement will also entitle iPod consumers to a $50 voucher towards the purchase of any Apple product or services - with the exception of iTunes music. Consumers must fill out a claim form in order to receive the voucher and will have 18 months to redeem it at any of Apples stores.

A California Superior Court judge will rule on whether to approve the tentative settlement on August 25 although consumers began receiving notice in the mail of the deal on Thursday.

"The settlement easily satisfies final approval criteria," said Eric Gibbs, the lead lawyer in the lawsuit to Reuters. "It basically provides full relief to people who have had battery failure."

Apple faced a backlash from consumers when they found out it would cost $99 to replace their defective batteries after just 18 months of use.

More information can be found at the official Apple settlement site - http://www.appleipodsettlement.com/index.html