Actually, showing a still image for long does create a sort of burn in, but it is a temporary one that is remedied by flashing white, black, white (which it automagically does as you've certainly noticed). Bingo.
If I understand the request correctly, what FinancialWar wants is not a No-Sleep mode but rather a "Sleep, no-notification" one. Can't see why that would be damaging in any way to the battery performance, but I'm not sure any of those is feasible unless someone highly skilled hacks right at the core of the Android system.
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