Got a reply from HTC Support today:
I?m sorry to hear that you are experiencing difficulties with the paint peeling from your phone.
My apologies, James, however this type of damage it likely not covered by the warranty as we do not cover wear & tear, meaning if this was put in for a repair you would most likely be charged.
I would suggest speaking to your insurance company or network provider to see if they can provide an alternative.
If this is how an HTC phone stands up to "wear and tear" - and is seen to be ok by HTC - then it will be the first and last one I ever own. My Nokia E71 went 3.5 years under heavy use and abuse without a mark to be found on the whole thing and is still going. My Radar is struggling to survive 3.5 months...