I've read--and I have no idea if it's true--that the phone is smart enough to:
1) not run down the battery all the way so that degradation isn't so bad and it won't enter a state where it can't be charged
2) when it is fully charged power is shut off and the battery is allowed to run down a bit so that it isn't being degraded. After 5% or so, the charger comes on again.
What I'm saying is that we probably don't need to worry too much about running the battery all the way down or leaving it on the charger all night. That being said, I still totally agree that the optimal approach would be to charge the battery when it hits about 40% and then remove it from the charger soon after it says the battery is charged. Still, with my original droid I would run the battery down all the way quite often and I would leave it plugged in overnight all the time and the battery on it still works close to how it was when new, yet it is 2 years old.
I suspect that the battery will never be fully charged or discharged by the phone. I just couldn't confirm it so I hew to the accepted wisdom as the safest way to approach it. As far as taking the phone out as soon as its charged, I've never done that and never had a problem with a battery.
I do know that I've never pulled the phone off the charger and seen 100% FWIW.