In his weekly email newsletter, David Pogue of The New York Times sets it straight:
But here’s the thing: The typical iPod battery does not, in fact, die after 18 months. That’s possible, but not typical; I have two, and they’re still going strong after about three years.
The iPod literature makes clear that the battery can be charged between 300 and 500 times. So to burn out the battery in 18 months, you’d pretty much have to charge and deplete the battery (eight hours of playing) almost every day. That’s probably not how most people use their music players.
A new battery is $100.