When your battery is fully charged, be it in your laptop, iPhone or iPod, and you let it run until the device dies, you've used up one cycle. Over time, it will lose its ability to retain a full charge. However, there are simple steps you can take to prolong its life (or draw out its death. However you choose to look at it). The folks at CreativeBits recommend at least one cycle every two weeks.
You can also use tools like CoconutBattery and iStatPro to see how many cycles your laptop battery has completed and to monitor its health.
For a more thorough look at your laptop's battery check out our article on battery calibration.