Correct Panda Battery Procedure:
When the device is in use, do not use USB charge. Turn it off. When the E17/E07K is on it's final bar of battery, turn USB charge(or the USB cable) on and charge it to full. And then unplug or turn off USB charge and use until you are on your last bar of battery left. When you see the bars reduce to one, it would be best to start charging(sometimes you are out, and you can't, that's understandable, a few times won't hurt). Li-ion batteries like the one's found the in the FiiO E17 Alpen's don't react well to a full cycle of charge and FULLY de charge until the battery is dead. This has been proven to be actually
bad to the life of li-ioin batteries.
HOWEVER., you should do a full cycle where you fully charge up the device and use it all the way until the device automatically turns off
ONCE every month or two as that has been shown to actually be good for the battery
WHETHER you use it constantly or not. Do not fear my friend, even if USB charge is turned off when the device "dies" it will still charge after it runs out of power naturally as the E17/E07K's firmware will reset!
Li-ION batteris on general will last effectively 1000 complete charges before battery drops below about ~70% of the original storage. This is still acceptable by most consumers standards.
20 hours full battery life * 1000 effective uses =20,000 hours / 24 hours a day = 833 days theoretically before the E07K under theoretical conditions will decrease to 70% of its original storage life and this is with a full depletion and then charge cycle. And that is 24 hour usage as well.
FiiO currently reports that they will send replacement parts for a very low price. The battery is not that hard to user replace(but not under warranty).
Partial charges for Li-ION's are better but of course constantly doing partial ones has also been reported to have an effect on the device as well which is why I recommend to charge before all power is gone and to charge till full.
The last point to make is that you can't use a device if you keep on babying it. Using a device and enjoying it is part of that batteries intent and life cycle. Honeslty, ANYTHING you do to it will have an effect on battery life. The majority of the time, it is a minute effect to something like an audio device. (This advice does not hold for Power Wheels, those buggers need proper battery handling). Enjoy the device, theoretically it will hold up well for many years.
http://batteryuniversity.com/learn/article/battery_performance_as_a_function_of_cycling
http://batteryuniversity.com/learn/article/how_to_prolong_lithium_based_batteries
Disclaimer: I am not an expert on batteries. I am self taught. Please correct me if something is wrong. But use sources and not just something your papa or person told you to always do.