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.