Lion batteries as used in Laptops have a life span based on numbers of cycles (complete recharge/Discharge) and time that's passed (so even if you don't use the battery it will loose it's ability to hold charge).
Even if the battery is part discharged and then recharged that counts as part of a cycle (so two discharges to 50% counts as one cycle). That's one of the few bits of battery science I don't understand!
There seems to be a lot of advice out there to either use the battery in a laptop or to take the battery out if you're not using it. I'm not sure if that advice is actually useful and a lot of experts seem to suggest it's wrong.
Realistically in your case whether something's wrong is somewhat dependent on what you mean by not holding it's charge. If it started off lasting around 3 Hours and has now dropped to 1.5-1 hours that would about match my experience.
Exact times a battery will last will also depend on what you do. I find I have more running on my laptop now than when I first got it which is likely to use more battery power (CPU's being more heavily used means the fans are running more)
Older laptops had a tendancy to "overcharge" their batteries, which would decrease their life significantly. In this case, leaving the battery unplugged while on the mains would help battery life (should note that if you do do this, to leave the battery at around half charge). Modern laptops are generally more clever than this, and can work out for themselves when to stop charging the battery, at which point they will do so. So assuming your laptop is relatively new, there should never be a need to remove the battery from it, except to replace it.
It may be worth running some discharge/charge cycles on the battery (let it drain to 0%, and then fully charge it back to 100%) to see if that helps matters. There's not much you can do to stop a battery aging though, it will die out on its own eventually.
I've heard mixed reviews about Dells and their battery life. Mine for example can still hold roughly 4 hours after three years. A friend's, however, won't hold charge at all now only after a year or two. But yeah, do the suggestions as posted above, but I wouldn't hold your breath.
on my case, i have old laptop, fujitsu and pentium 1, ram just only 64 MB, it's stiil good, but to bad, the battery is not any longer on good condition, so when i want to use it, i always charge it, i want to upgrade it but i' worry cos this is an old model...scare if no any sparepart will macth with in...