The Prius is currently built in Japan. There were plans to open a plant in Mississippi to build the Prius in the U.S., but that has been shelved due to the downturn in the economy.
For Prii sold in the U.S., the battery has a 8-year / 100,000-mile warranty. If you bought and registered the car in CA, CT, MA, ME, NY, NJ, RI or VT, the warranty is automatically extended to 10 years / 150,000 miles.
Here's the warranty at Toyota:
http://www.toyota.com/prius-hybrid/warranty.html
If the battery fails during the warranty period through no fault of your own (i.e. you didn't do anything stupid like crash the car or tamper with the hybrid system), replacement cost is FREE.