A regulator service interval of 12 months was a very good idea when internal regulator parts and O-Rings were made of natural rubber. The rubber would abrade, dry out, or just wear out over just a few seasons, so you absolutely had to service your regulators yearly to prevent this from happening. Currently, regulators no longer use rubber parts (other than maybe exhaust tees), and the new synthetic materials like Viton, and Butyl (?) have much longer life spans than the rubber parts the service recommendations were based off. The service recommendations, however, were never increased, either as a liability issue, or just so the dive industry could make more money (probably a combination of both).
The first thing that would happen to a modern, well-cared for regulator is that the HP and LP seats take a set to them, therefore affecting the IP and cracking pressure...
The internal parts of the reg has a sharp round barrel called an orifice that presses against a seat when the valve is closed. When the valve is opened, the orifice moves away from the seat slightly to allow air to pass through. Over time, the sharp orifice pressing against this seat can cause the seat to get a small indentation or set in it. The deeper the indentation gets, in general, the farther the orifice needs to travel to properly seal against the seat. You have one seat in teh First Stage, and one seat in each second stage. When the seat in the first stage takes a set, it can cause the Intermediate Pressure (the pressure supplied over the LP hoses) to either increase or decrease. When the second stage takes a set, it will generally cause that stage to breathe easier, or freeflow slightly. A second stage with no pressure applied to it (with the exception of Posiedon regs) will have the LP orifice resting on the LP seat. First stages vary, but long story short, any set will happen whether or not you use the regulators.
I rebuild all my regulators myself. I generally have a very good idea of what to expect from my regs performance wise, and I can tell if they are not breathing properly. I also test the IP of the regulators on a regular basis, so I can tell if it is drifting over time. Generally, if a reg is not breathing the way I want it to, it is only a five minute adjustment to the orifice height, but I can guarantee that any shop you take it to will not do this for you. They will insist on a full service of the reg.
As far as the warranty goes, you will be paying more in service fees, normally, than you will in parts. Sherwood kits are practically free. Scubapro kits are extremely marked up ($25 retail for maybe $1 worth of parts), but you can't get the seats anywhere else, so they got you. IOW, if you get your regs serviced every other year, and pay for the parts, you may still come out ahead $$$ wise. If you go three years, I guarantee you will.
I will not tell you whether it is safe or not to service your regs less than yearly, although some makers now recommend a two year service interval on their regs (Atomics and Dive Rite IIRC). What I will say is that I, personally, would not have any reservations diving with an otherwise frequently-used and well-cared-for reg that breathes well, but hasn't been serviced in a couple years.
Tom