Usually the battery loses capacity and stops working before the 300-500 charge cycles are up though, my VAIO SR chews through batteries in about 150 charge cycles and my PowerBook had its runtime reduced by half after only 120 charge cycles. You’ll probably never see over three years of full-capacity use out of a battery that is used regularly.
Besides the charge cycles, the chemistry of the battery changes during its lifetime, and this leads to it not working as well:
“Aging of lithium-ion is an issue that is often ignored. lithium-based batteries have a lifetime of 2-3 years. The clock starts ticking as soon as the battery comes off the manufacturing line. The capacity loss manifests itself in increased internal resistance caused by oxidation. Eventually, the cell resistance will reach a point where the pack can no longer deliver the stored energy, although the battery may still contain ample charge.”
http://www.batteryuniversity.com/parttwo-34.htm
