I don't have a Karma (although it seems very nice!), but Lithium Ion batteries are universal in the way to deal with them.

Most batteries lose charge over time, so this is what you are seeing.

The life span is very likely to be the same as the iPod, probably around 500 charge cycles. It's a shame Rio didn't make the battery user replaceable after all the problems Apple have had.

Lots of good information on Lithium Ion here: http://tinyurl.com/djkn