I downloaded the user’s manual and the battery is warranted for one year. I can understand why they don't offer a longer warranty because if you abuse the battery and don't store it and maintain it as they indicate I'm sure it will affect life.
I just ordered my 250pl system, so I don’t have any hands-on experience yet and will defer to posts from people that already have the system.
I bought my system from nycewheels.com. I had several conversations with their sales guy and amazing enough he didn't try to up sell me to Lithium Ion. In fact he told me the NiMH would be just fine. In the end I chose the Lithium Ion, but maybe that wasn't the best choice. To replace the 250 NiMH costs 400 dollars while the Lithium is 800. I chose the Lithium because I am not on a budget and I think the lower weight, less memory effect, slightly more energy storage, and possibly a longer life balance out the extra cost.
During our conversations the sales person indicated that their experience was that the Lithium batteries lasted longer than advertised (close to 800 average charges). By average charges I interpreted what he was saying is that many people don't fully discharge the battery and shallower charges cause the battery to last longer and for more charges. I suspect if you consistently charged your battery and consistently did not fully discharge while ridding, that you would get good life time.
Another item reveled by the user’s manual is that the 250 watt system is 25, 50, 100, and 200% assistance while the 350 system is 35, 75, 150, and 300% assistance. If you are like me and want more options for exercise i.e. more settings that allow you to be a major contributor as opposed to a minor contributor of the total power being applied to the ground, then the 250 system might be a better choice. You don’t appear to need a very long range, and from what I’ve read the estimated distance per charge is accurate.