Resetting SMC worked!
Have had a "Service Battery" message under the battery icon for about a month, but the battery seemed to be working fine on my Unibody MacBook running Lion 10.7.1. Maybe my battery life was less than 2 hours active use, full screen brightness, Wi-fi and Bluetooth on, but it charged up to 100% relatively quickly, so I was not in a panic. However, I did my research today, found the comments about the SMC reset. So, I shut down, removed adaptor plug, opened battery cover and removed the battery, then held down the power button for a count of 5 (well, maybe 7) and then put the battery back and the adaptor and restarted my machine.
Now under the battery icon it says Battery Charged and Power Source: Power Adaptor, and with option click it now says Condition Normal. So I am happy again. Will see later if it has improved the battery life too. It started after I upgraded to Lion from Snow Leopard and I notice that others got it after upgrading from Leopard to Snow Leopard, so maybe resetting SMC may need to be redone after some OS updates.
According to CoconutBattery, my current charge is 97% (Apple reports 98%), my current battery capacity is at 76%, my MacBook age is 35 months and my battery cycles are at 266. Should be good for another year or two.