There's an update that addresses battery performance issues (not charging, not recognized, etc.)
Apple - Support - MacBook and MacBook Pro Battery Update
If the update addresses performance issues and, as stated on the Apple webpage, "factors causing the performance issues do not present a safety risk" and the battery may continue to be used, why is one of the symptoms is the battery being visibly deformed? If the battery is in fact deformed, I would think that there IS a safety issue.
At any rate, the warranty coverage on the battery has been extended to two years and batteries that require replacement will be replaced even if out of warranty (which if the oldest MacBooks are slightly over a year old and the warranty is two years, it's not possible to be out of warranty).
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