is a Hard reboot bad for the iphone?

There's no evidence from Apple or their documentation that resetting the iPhone is harmful, although they do state that it should be done only when a normal restart doesn't clear the problem. Actually, resetting periodically is a good idea in the same way that rebooting a computer periodically is a good thing. I've had all three generations of the iPhone and performed resets periodically on all of them and never experienced any problems or software anomalies.

If you mean when you hold down the sleep/wake button and the home key for 10 seconds - then yes and no. No, if that is your last resort. Like a white screen or lock up, but yes if you are continually doing it.

I was told after mine white screened and I had to do it - to back up the data, restore the software and treat it as a new phone in itunes. Don't reload the back up to the phone. You could reload the issue that caused your phone to go bad

The hard restart can cause your software to start doing things, like running programs behind the scene. Mine actually started depleting the battery too fast and giving incorrect usage time - like 2.5 hours longer than I had used it. I restored the software and am watching it to see if it resolved the problem.

You can take it to the genius bar and have them run a diagnostic on it. I did and they found nothing- not even the fact it white screened or I had to do a hard restart. At least they will have a record of it, so next time you have a problem they will be more willing to help out.

The hard restart can cause your software to start doing things, like running programs behind the scene.

Completely incorrect. A reset, as Apple calls it (hard restart as you call it), will not harm your iPhone at all. It's the equivalent of rebooting your computer. It does reset your usage settings though... fully charging the battery corrects this.

From the manual.

Restarting and Resetting iPhone
If something isn’t working right, restarting, force quitting an application, or resetting
iPhone will likely solve the problem.

Restart iPhone: Press and hold the Sleep/Wake button until the red slider appears.
Slide your finger across the slider to turn off iPhone. To turn iPhone back on, press and
hold the Sleep/Wake until the Apple logo appears.

If you can’t turn off iPhone or if the problem continues, you may need to reset. *A reset*
*should be done only if turning iPhone off and on doesn’t resolve the problem.*

Force quit an application: Press and hold the Sleep/Wake button on top of iPhone
for a few seconds until a red slider appears, and then press and hold the Home button
until the application quits.

*Reset iPhone: Press and hold the Sleep/Wake button and the Home button at the*
*same time for at least ten seconds, until the Apple logo appears.*

I have been calling it a hard restart (but they understood since I described it to them) but it appears it is a soft reset.

The best thing to do is make an appointment with the genius bar. People will give you conflicting advice and the best person to ask is someone trained to give you advice.

Not sure if it is equivalent to rebooting your computer - maybe ask them that. I was also told that it could cause my software to do funny things (as described in my original post) So far since restoring the software my battery is holding the charge better and my usage time isn't way off. Coincidence? - maybe.

When I told an Apple employee I did the "soft reset" ( I described what I did even if I used the wrong term) he said that was the equivalent to driving down the highway and pulling your emergency break. That doesn't sound that good to me.

You probably mean a reset and it causes no harm. I usually do one about once/week.

See p. 46 of the manual... http://manuals.info.apple.com/enUS/iPhone_UserGuide.pdf

What is a hard reboot?