How long do Lithium Ion batteries normally last?

I would say that any laptop battery should last much longer than a year, even in a reduced capacity. You should check out this page for some data and tips on how to charge your battery and how long you can expect it to last. From the summary:

• Avoid frequent full discharges because this puts additional strain on the battery. Several partial discharges with frequent recharges are better for lithium-ion than one deep one. Recharging a partially charged lithium-ion does not cause harm because there is no memory. (In this respect, lithium-ion differs from nickel-based batteries.) Short battery life in a laptop is mainly cause by heat rather than charge / discharge patterns.

• Batteries with fuel gauge (laptops) should be calibrated by applying a deliberate full discharge once every 30 charges. Running the pack down in the equipment does this. If ignored, the fuel gauge will become increasingly less accurate and in some cases cut off the device prematurely.

• Keep the lithium-ion battery cool. Avoid a hot car. For prolonged storage, keep the battery at a 40% charge level.

• Consider removing the battery from a laptop when running on fixed power. (Some laptop manufacturers are concerned about dust and moisture accumulating inside the battery casing.)

• Avoid purchasing spare lithium-ion batteries for later use. Observe manufacturing dates. Do not buy old stock, even if sold at clearance prices.

• If you have a spare lithium-ion battery, use one to the fullest and keep the other cool by placing it in the refrigerator. Do not freeze the battery. For best results, store the battery at 40% state-of-charge.

I recall reading a review, which I cannot find at the moment that suggests that the killer for Li Ion batteries is heat. Which I suspect is one of the reasons for removing when running on wall power.

The worst thing that can be done is to close the lid, expect it to suspend to RAM, and shove it in your laptop back, when Suspend to RAM decides NOT to suspend.

I am pretty sure this has severely degraded the life of my battery. My suspend to RAM can be temperamental and sometimes I do not notice that it did not work, before putting it in the bag.