The battery is there to save your data for up to 72 hours in case of a power failure while data is buffered on the RAID card (usually while check blocks are being calculated or checked) before being written to multiple disks.
Your RAID card will still function, but if the AC power drops, you lose the transfers in progress, with no hope of recovery.
Contact Apple for a new battery. It may be available as a kit, or you may have to get it sent to the store and bring your card in for a quick swap. Be sure you are talking about the right card -- there are two different ones for the Mac Pro and two different ones for the XServe.
The battery does re-condition itself every few months. It deeply discharges and then re-charges in an attempt to extend overall battery life and eliminate the "memory effect" problem of nickel-cadmium batteries. If you catch it while the battery is discharged and before it has recharged, it will be running with the cache disabled until the charge returns to a high enough level.
If it stays discharged, it needs to be replaced.
Question: How often does the battery condition itself?
Answer: During normal operation, the battery will condition itself approximately every 3 months.
Question: Why am I receiving a warning "The Apple RAID Card installed in your system requires your attention" after rebooting?
Answer: If you do not clear out all alerts and warnings in Raid Utility, when the Xserve or Mac Pro reboots there will be a dialog box asking you to clear the warning. When all of the events are cleared, you will no longer receive this dialog on startup.
I have the same problem too:
Battery failed (code 0x#0 = 18)
or in my case, I am german: Die Batterie funktioniert nicht (Code 0x#0 = 18)
It happened the first time after one year and I replaced the battery. One year later it happened again and I replaced the battery. And one more year later again. This time I decided not to replace the battery.
I booted the system from the recovery media and started the the raid utility from there and it said: battery charging.
So I returned to my "normal" partition and it said: battery charging.
A few days later: Battery failed (code 0x#0 = 18)
I repeaded this several times, always with the same result.
I was quite sure that all the trouble resulted from a firmware bug.
So I did shut down my Mac, and removed my raid card. On the raid card I disconnected the battery and waited a few minutes and reconnected it. I reassembled all and started my Mac.
It is running now for more than a month without any further errors.