Why is my MacBook battery swelling?

I would ditch the battery as soon as possible. A swelling battery poses a fire hazard. Even if it's still holding an ok charge, it's not a good idea to it keep in the computer, as it may leak battery acid into the computer. If you don't want to replace it, then I would consider removing it, and running the computer off the wall charger only.

Take it to the Apple store -- they will most likely replace it for free.

"I have an old MBP A1150 I inherited from my B-I-L. The swelled battery was still usable, however, I sometimes had to power up the book several times to get it to boot. Eventually the battery top bowed/separated and pushed up on the track pad and enter bar from underneath to the point where I could no longer click on a function. Had to take it out and run on house voltage until a replacement battery arrived. At least I could still use it. Once I removed the battery, the enter bar would depress far enough to function again.

So, if you aren't replacing a swollen battery, you might get by for a while, but you will get to the point where have no other choice but replace it, once it swells to far/wide/high for the keys to function properly."

local apple store replaced mine on my late 2006 macbook and replaced the keyboard/trackpad and screen bezel for free.

"Very likely caused by overheating. Your battery is most likely 'on the way out'. just keep an eye on it in case it gets too bad, and be prepared to buy a replacement.

How is the capacity going?"

"My MBP 17 did the same thing - it's been getting really hot. I replaced the battery with OWC's higher beefier one. Interesting that the battery KEPT swelling after I took it off. No goo coming out but the packets inside are quite visible. The heat may taken it's toll though - it's running like snail snot today. Disk utility isn't helping.

Apple had already replaced the first one at 1.5 years (out of warranty) for free. Kinda don't think they'd give me a second one."