Again, the concern is heat. Simply discharging a battery, however quickly, will not harm it in anyway (well, technically, over-discharging a battery can permanently damage it, but the "fuel gauge" in nearly all modern Li-ions prevent that). As you discharge any battery the chemical reacting creating power as well as resistance in internal conductors cause the battery to heat up - the faster the discharge the faster the the battery gets hot. Like with the LED, if the back panel of the phone ever gets too hot to comfortably hold, stop what you are doing.
The Moment does have the ability to detect the battery's temperature (and you can monitor it with Spare Parts), so it may actually have some kind of self-protection mode that will either shut down the phone or certain services if the battery gets too hot. This is pure conjecture on my part though.
Originally Posted by CriticalCritic
So, because the battery jumped from yellow straight to critical (completely skipping red) it's apparent that the phone rapidly changed its battery remaining estimates to reflect the huge increase in consumption.
As far as I know the Moment does not directly take currant drain rate into consideration when determining battery level (like some laptops do), the battery state is purely a reflection of current battery voltage. What you saw would have been created by a sudden voltage drop in the battery caused by a high load. Restarting the phone simply gave the battery time to recover, which it would have done nearly as well with the phone turned on. Depending on what battery code you are using (stock CJ05 or Cl14 kernels vs zefie's kernel) you may have actually been able to leave the phone on and see the battery meter go up back to yellow.
I generally keep on the low intensity setting, it's normally bright enough for my needs and easier on the battery. If I need a brighter light for longer, I get a real flashlight