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Li-ion batteries have no memory effect at all, so that's nothing to worry about. They can, however, be damaged by being drained too low.
But, there are two forms of protection in the Kindle. One, that all li-ion batteries found in commercial devices have, is a protection circuit built in to the battery. This will prevent the battery from draining any more if the voltage gets too low.
The other is the software. Once, by accident, I let the battery drain all the way. The Kindle put up a screen that said the battery was too low and it needed to be recharged. It was just that screen, nothing else. I couldn't do anything until I plugged it in for a while.
So while you won't severely harm the battery, it's a good idea to not let it drain past 20%. Remember, li-ion batteries don't have a memory effect, so you can charge them whenever you like. It'd be a good idea to just plug your Kindle in every night.
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