This is very wrong, you should never ever let a lithium ion battery become 100% discharged, it will significantly reduce the total lifetime of the battery (as in, how many times you can recharge it fully.)
Lithium Ion batteries are popular in consumer devices for the simple reason that they do not take much damage from charging from the middle of usage, they do not have a "chemical memory" in the same way a NiMH or NiCD battery have. However, that said, you should occasionally give it a good stretch, down to about 10-15% and then charge to 100% all at once to ensure it maintains full battery life capabilities.
As for the 99%, I wouldn't worry about that, battery remaining indicators are only estimates anyway. These estimates are based on variations of voltage discharged from the battery at any given time and various situational factors can alter this and it doesn't indicate the true battery life.
*THAT* said, if you are using a case and the iPhone is getting hot in that case, you will destroy your battery far more quickly. Heat is another primary enemy of lithium ion batteries (which is why the case design allows for heat to flow out easily through the connected plastic hence making the phone warm to the touch during heavy use.) If you prevent heat dissipation with a case or similar covering you'll reduce the total life span of your battery.
Apple has their own tips that are similar to mine at
http://www.apple.com/batteries/iphone.html