The truth is, if you use the "hibernate" feature of Windows XP, you save almost as much energy as you do turning off your computer for the night (minus unplugging it). And you won't have to endure a lengthy "re-booting" process the next morning; your computer should "wake up" in 30 seconds or less.
Lab tests done by Dell show that a PC running Microsoft Office uses 42.7 watts. If it runs continuously at that rate for 365 days, at 7 cents per kilowatt-hour, the power consumption costs would be $26.18 for the PC and $45.99 for a regular monitor, for a total of $72.17 for the workstation.
Flat-panel monitors use less energy than regular monitors. So the same workstation with Microsoft Office running for a year would use $39.67 in power with a flat panel.
Computer Monitors do use zero energy when turned off. But the CPU uses zero energy only if it is unplugged. Otherwise, even a "Turned Off" PC utilizes "flea power," or about 2.3 watts, to maintain local-area network connectivity, among other things. In "hibernate" mode, your PC uses the same 2.3 watts; in "sleep" mode, your PC uses about 3.1 watts.
Therefore at work, atleast turn off monitors even if you plan to leave the machines running continuously overnight just to save power.
People in developing countries face a different kind of problem. Since power failures are common, they have to sometimes turn off their computers in the middle of work as there are no proper electricity backup systems like UPS. They have to reboot the PC in short intervals and are often worried that this may damage the computer.
Turning off the power mains directly without properly shutting down the computer can sometimes be damaging especially to the software and data files. I faced a similar issue sometime back when I pulled the computer plug accidently and lost all the Google Desktop Sidebar settings (including TODO lists) though the Firefox windows were restored because of the Sessions Saver plugin. A sudden power outage can also harm the hardware of a computer.
Does frequent rebooting hurt a computer ? Earlier, PC hard disks did not automatically park their heads when shut off, and that frequent on/off cycling could damage the hard disks. Today's PCs are designed to handle 40,000 on/off cycles before a failure, and that's a number you likely won't reach during the computer's five-to-seven-year life span.
Frequent rebooting (Turn Off and On with software) does not really harm the computer provided you do it through the right process. Sometimes, when a computer gets slow, a simple reboot can also help in regaining the original speed.
Sources: Energy Star Computers | Microsoft