If the battery pack is completely worn out, you cannot use the Prius in a gasoline-only mode, because the high voltage battery pack is the only way the internal combustion engine can be started. There is no 12V starter motor in the Prius. If there is some juice and lifetime left in the battery, it can start the internal combustion engine, meaning that motor-generator 1 (MG1) can supply the power MG2 needs or vice versa. So, after startup, Prius is generating the electricity it needs. Some lifetime left in the battery is probably necessary for buffering the high-voltage electrical system.
However, if the battery pack is only somewhat worn out, it just means the electric-only range which is already short (1-2km) will be even shorter, perhaps hurting fuel economy. This is not in any way a problem, as the battery is oversized for the job it does, see my answer to Is there a diagnostic that can be done on a used hybrid car's battery pack?Is there a diagnostic that can be done on a used hybrid car's battery pack? for the detailed calculations.
Consumer Reports has tested an old Prius with 200 000 miles, and the mileage was the same as when new. Also, many Priuses (Prii?) are used in taxicabs, and they work in this severe application quite well. So, you probably don't have to worry about the Prius battery. I understand that Honda hybrids have had battery troubles, but no such trouble is there for Toyota hybrids. Also, in Finland, there is a 10 years / 350 000 km warranty for the hybrid battery. If the battery really wears out, chances are that a $500 junkyard battery will have much lifetime left, as battery failure is so rare in these hybrids.
