Do I have a defective battery?

I have a MacBook Core Duo and it recently told me to service the battery. When I looked in iStat Pro I saw that I had 126 charge cycles and 60% health. I calibrated the battery and it stayed the same. I have only had the battery for about a year and a half now and I know that you shouldn't have it plugged in for a long time. I charge it then leave it unplugged until it gets to 10% and then I charge it. The reason why I ask if it is defective is because my neighbor has a battery in their Core Duo MacBook that is original to the computer with 745 cycles on it and it has 75% health. If you think it is defective then do you think I could get it replaced by Apple under a manufacturing defect? Thanks in advance.