What mfr battery is it? How old is it?
What's the owners manual say about the red indicator?
If that says red is ok to charge, have you tried disconnecting it from the vehicle and hooking up a charger - does it retain a charge then?

Are you sure there is a "light" on the battery? Maybe its an indicator. There were some batteries that had a color change indicator. The indicator changed the color of its reflected light when its tip was no longer in the electrolyte fluid. Green meant ok, and it would change to red when the electrolyte became low enough to expose the tip of the indicator. Therefore, my guess is that your battery fluid is low.

If your battery is 3 to 4 years old, I'd replace it. However, if it is younger, try to remove the fill caps and refill the cells with de-ionized or distilled water. Bring the fluid level up so that it covers the top of the plates, but not all the way to the top of the cell.

The caps of many "maintence free" batteries will pry off. These batteries were meant to endure a long period without attention. However, if the battery has been overcharged for a lenghty period, or was in an overly hot enviorment, it will overwhelm the built-in gas recombinator and loose fluid.

That brings us to another point: You say that the charging system is ok, but did you measure the voltage accross the battery terminals after the motor has run long enough to recharge the battery? It could be too high - measure it.

But wait. Before you pry off the caps which may void the warranty, check your warranty situation.

If:
o you have a warranty
o The battery is relatively new, say less that 1.5 years old.
o The charging system is ok
o And the battery has not experienced any out of the ordianry service conditions.

Then consider going back to the place where you bought the battery and check on how much warranty is left. You might opt to replace the battery under warranty.

Its a motorcraft over 7 years old. No warranty. Nothing in owners manual that mentions the red indicator(sorry,didnt mean to say it was a "light"). I have tried charging but dont think its holding much because when say, I turn the radio on with engine off, it completely kills the battery. I'm sure the charging sys. is working o.k. because when I run the engine at 1500rpm, I see a voltage rise of about 3V which according to my procedure is what I should see to indicate charging sys. working properly.
This brings me to another thing that I found and which concerns me a bit...I disc. the neg. batt. term. and inserted my VOM in series and with the engine off, I saw a steady drain of 1.8A.(nothing else on i.g. radio etc;) Cant think of anything that could be drawing this with engine off.
One more thing, I remember I did read something about it being possible to add electrolyte to "maintenance free" batts. but lable on this one says "Do not add water"

Your battery is 7 years old. This is longer than most batteries serve. I wouldn't hesitate to change it out.

The 1.8 amp drain is another matter. This seems lsrge to me. I'd expcet some drain from keep-alive stuff such as the radio's memeory, the Engine Controller, and any security systems. Is there an after-market security system installed? That would be suspect.

The 1.8 A drain is about right for a little lamp like the glove box. One way to start checking is to reconnect your VOM and atart pulling fuses until you discover which electrical branch is responsible for the drain.