Service battery after 2 years of 659 cycles???

Question

Hi! My laptop is a 13 inch macbook Air 2011 model and it right now says I need to service battery (after 659 cycles). Why is that? and Should i change my battery? my original battery max was 6700 mAh and now its 4780 mAh.
Battery Information:
  Model Information:
  Serial Number:          D8614170526DKRNAA
  Manufacturer:          SMP
  Device Name:          bq20z451
  Pack Lot Code:          0
  PCB Lot Code:          0
  Firmware Version:          406
  Hardware Revision:          000a
  Cell Revision:          162
  Charge Information:
  Charge Remaining (mAh):          313
  Fully Charged:          No
  Charging:          Yes
  Full Charge Capacity (mAh):          4780
  Health Information:
  Cycle Count:          659
  Condition:          Service Battery
  Battery Installed:          Yes
  Amperage (mA):          3287
  Voltage (mV):          7815
System Power Settings:
  AC Power:
  System Sleep Timer (Minutes):          25
  Disk Sleep Timer (Minutes):          10
  Display Sleep Timer (Minutes):          5
  Wake on AC Change:          No
  Wake on Clamshell Open:          Yes
  Wake on LAN:          Yes
  Current Power Source:          Yes
  Display Sleep Uses Dim:          Yes
  PrioritizeNetworkReachabilityOverSleep:          0
  RestartAfterKernelPanic:          15
  Standby Delay:          4200
  Standby Enabled:          1
  Battery Power:
  System Sleep Timer (Minutes):          60
  Disk Sleep Timer (Minutes):          10
  Display Sleep Timer (Minutes):          3
  Wake on AC Change:          No
  Wake on Clamshell Open:          Yes
  Display Sleep Uses Dim:          Yes
  Reduce Brightness:          Yes
  RestartAfterKernelPanic:          15
  Standby Delay:          4200
  Standby Enabled:          1
Hardware Configuration:
  UPS Installed:          No
AC Charger Information:
  Connected:          Yes
  ID:          0x0100
  Wattage (W):          45
  Revision:          0x0000
  Family:          0x00ba
  Serial Number:          0x00718639
  Charging:          Yes

Answer 1

When you get the service battery message the battery needs to be replaced - it  is like the service engine warning lamp on a car or the robot waving its arms and yelling "Danger Will Robinson."
If you have Apple's 3 year AppleCare you may be able to get the battery replaced under warranty - Apple says the battery should retain 80% of its charge after 1000 cycles and you didn't even get 1000 cycles out of it. Even if it isn't still under warranty you can at least ask for free replacement or a price break since it failed before reaching 1000 cycles. I know people who have been successful with such an appeal.