The battery seems to be remarkably stable. I've seen a very few scattered reports of battery problems but none out of warranty. Note this is not to say it's never happened but just that I've never heard of it (and I frequent a lot of Mac forums).
As I said early on, my iPod is 2 years old on Dec 1st and I listen to it pretty much all day, every day at work and have since I got it. When it was new I timed the battery at 10 hours. I'm quite sure it still does 8 hours easy but haven't run it all the way down in a long time.
Having said all that, if the battery does die, you're going to have to cast about to find a replacement. I don't think you'd have to send it to Apple. The iPod isn't that hard to take apart and the battery is right on top when you pop the back off.
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