Fasting in Sha`baan - A Summary (Hadith No. 1633)

Bismillah.
Volume 3, Book 31, Number 138:
Narrated Abu Huraira (radiallaahu `anhu):
The Prophet (sallallaahu `alayhi wasallam) said, "None of you should fast a day or two before the month of Ramadan unless he has the habit of fasting (Nawafil) (and if his fasting coincides with that day) then he can fast that day."

Ruling on Fasting in Sha`baan

The basic ruling regarding fasting in Sha`baan is an this Hadith:
“When Sha’baan is halfway through, do not fast.”
Narrated by Abu Dawood (3237); Ibn Hibaan (1651); classed as saheeh by al-Albaani inSaheeh al-Tirmidhi.
There's no restriction on fasting in the first half of Sha`baan. The ruling in the above hadith is only concerning the second half.

Why the Prohibition?

The reason for this prohibition is that continually fasting may make a person too weak to fast in Ramadaan. 
If it is said that if he fasts from the beginning of the month he will become even weaker, the response is that whoever fasts from the beginning of Sha’baan will have gotten used to fasting so it will be less difficult for him to fast. 
Al-Qaari said: The prohibition here means that it is disliked, as a mercy to this ummah lest they become too weak to fulfil their duty of fasting during Ramadaan in an energetic fashion. But those who fast all of Sha’baan will become used to fasting so it will not be difficult for them.

Exceptions to the Rule

If any of the following apply to you, you MAY fast in the second half of Sha`baan:
  1. One who has a habit of fasting, such as a man who habitually fasts on Mondays and Thursdays, which he may do even after halfway through Sha’baan. The evidence for that is the words of the Prophet (peace and blessings of Allaah be upon him), “Do not anticipate Ramadaan by fasting one or two days before it, except a man who fasts regularly, who should observe his usual fast.” Narrated by al-Bukhaari, 1914; Muslim, 1082.
  2. A person who started fasting before halfway through Sha’baan, and connects what comes after the halfway point to what came before. This is not included in the prohibition either. The evidence for that is the words of ‘Aa’ishah (may Allaah be pleased with her) who said: “The Messenger of Allaah (peace and blessings of Allaah be upon him) used to fast all of Sha’baan and fast all of Sha’baan except a little.” Narrated by al-Bukhaari, 1970; Muslim, 1165. This version narrated by Muslim.
    Al-Nawawi said: “He used to fast all of Sha’baan and fast all of Sha’baan except a little.” The second phrase is an explanation of the first, pointing out that by “all” what is meant is “most”.
    This hadeeth indicates that it is permissible to fast after halfway through Sha’baan, but only for one who joins that to what came before the halfway point. 
  3. An exception from this prohibition is also made for one who is making up missed Ramadaan fasts
[IslamQA]