According to a Knowledge Base article posted last week, Apple is now replacing (free of charge) frayed, discolored and deformed MagSafe power adapters for MacBook and MacBook Pro.
But -- and there's always a but -- they will only replace it if there's no sign of "abuse." So if you've been doing the right thing and holding the hard plastic connector to disconnect the cable, you might not have to pay another $80 for a new power adapter.
If your connector looks like the one pictured, and has been babied its entire life, then take it back to an Apple-Authorized Service Provider or an Apple retail store for an evaluation and replacement. It doesn't matter if the warranty has expired.