The battery in all iPods cannot be removed or replaced by the user without levering the unit open. This is unusually difficult for a consumer device, although some rival products have a similar enclosed battery. Compounding this problem, Apple initially would not replace worn-out batteries. The official policy was that the customer should buy a refurbished replacement iPod, at a cost almost equivalent to a brand new one. All lithium-ion batteries eventually lose capacity during their lifetime (guidelines are available for prolonging life-span) and this situation led to a small market for third-party battery replacement kits.
Apple announced a battery replacement program on 14 November 2003, a week before a high publicity stunt and website by the Neistat Brothers. The initial cost was $99, but it was lowered to $59. One week later Apple offered an extended iPod warranty for $59. Third-party companies offer cheaper battery replacement kits which often use higher capacity batteries. For the most recent iPods, soldering tools are needed because the battery is either soldered onto the main board, as with the nano; or attached to a metal backplate, as on the video iPod.
The vast majority of even the earliest iPods, now over four years old, continue to function just fine. Some iPods, however, based on age and usage style, will have more battery degradation than others. Lithium ion batteries are only good for 300 to 500 charge/discharge cycles. For this reason, certain customers' usage patterns may cause the batteries to degrade, or fail, sooner than others.
If the battery does fail, and the iPod is no longer under its original one year warranty or $59 AppleCare Protection Plan for iPod, or any of numerous third party service plans, you don't have to buy a new iPod. You may replace the battery yourself for as little as $25, or have Apple perform the replacement for $59.
If you're a battery, you're either working or you're dead....