The best way to discharge a mobile phone battery

to leave it on the phone till the phone switches off.
Nickel Cadmium (NiCd)

All the foregoing applies to NiCd batteries. To get the best life out of a NiCd, let it run down every second or third charge. Do it more often and you shorten its overall life: do it less often, and you risk reducing its charge capacity.
Nickel Metal Hydride (NiMH)

NiMH batteries need much the same care as NiCd, except that you only need to run them down every week or two, if they are charged every night.
Lithium Ion (Li-Ion)

Lithium Ion batteries are very different. You should not deliberately discharge a Li-Ion cell. In fact, if you were to manage to run one flat, it would probably be damaged. There is electronics inside each Li-Ion battery to protect it from such abuse, but don't take the risk!

To keep your Li-Ion battery in good shape, simply charge it overnight before it runs down. If a full battery at all times matters to you, you can top it up whenever you like, but you'll probably get a longer service life from it if you only recharge it when it is getting a bit low.
Storage

Batteries of any type don't like to be left discharged. In general, if you have a spare battery, it is probably best to use it alternately with its partner.
Declining years

Age and infirmity come to all of us, but mobile phone batteries get there quicker than their users!
NiCd

A NiCd battery will lose its charge capacity, and may run flat on its own. This is often caused by sharp, spiky crystals growing through the separators of the cell, causing a short circuit. It is possible to "flash" these away by applying a very high current (such as from a large battery) for a short while. The current through the spike will melt it away, curing the short circuit, but that's not really a cure: the hole in the insulator will still be there, and there will probably be other crystals poised to do the same in another place. If your NiCd battery has managed 700 or more charge cycles, or has been exposed to excessive heat or other abuse, replace it!
NiMH

A tired NiMH battery will probably give good standby times, but as soon as you make or receive a call, you'll discover that it can't provide the current needed. This is because age and heat cause the crystals inside the cell to get bigger, which means that their surface area falls in proportion to their volume. Unfortunately, there is nothing much you can do about this. If a NiMH battery has managed 500 or more charge cycles, it has done well. Time for a replacement!

Li-Ion

Li-Ion batteries can fail suddenly, possibly because the electronics inside it have gone wrong, but in general they simply fade away. Because the capacity falls gradually over the charge cycle life, when to replace it is a matter of when the charge capacity is no longer sufficient for your needs. Never try to revitalise a Li-Ion battery in any way, or expose it to excessive heat: the very high power density of Li-Ion makes such actions very dangerous.
Replacement

Because of the subsidy system, it is often cheaper to upgrade to a new model of phone (complete with new battery) than it is to buy a new battery. Having said that, it really is worth replacing a worn-out battery. It is common for people to remark that they wish they'd bought a new battery sooner - putting it off is rarely wise!
Disposal

When it is time to say good bye to an old, tired, battery, don't throw it on a fire: it could explode. Don't put it in your dustbin: there should be facilities for recycling rechargeable batteries provided by your local council.

Charging Batteries without Wires