Battery warning ''Service battery"

It's most likely because your battery is nearing the end of its useful life. Your battery has a maximum charge capacity that decreases with age and use. You can see the current capacity in Utilities --> System Profiler --> Hardware --> Power --> Full charge capacity (mAh):.

However, this doesn't tell you what your original Full charge capacity was. For this, you either need to look up the specs of your laptop, or use a utility like CoconutBattery.

This means your battery is at the end of its life. This happens to all batteries, sooner or later, depending on your type of usage and most importantly on the amount of cycles (i.e. full recharges).

Your battery will probably not last longer than one hour at this stage. You can of course try to train it by letting it drain the battery until the MacBook sleeps and then recharge it up to 100%, leave it recharged for at least a few hours, and then repeat this process a few times. By doing this, you sort of "reset" the battery and can get a few minutes more out of it. It helped me get at least 20 minutes more.

If OS X tells you to service battery, it means that you will need to buy a new battery if you want full capacity back. There is no warranty that would cover worn out batteries. I had had the same problem, but unless your battery has less than 200 cycles, this is absolutely normal and you should buy a new battery. Again, Apple will not replace your battery unless it's almost unused.