I always thought the argument was about the fact that when you turn the power on everything heats up and when you turn it off everything cools down. This heating and cooling causes components to expand and contract and thus reduces their life. I personally think that it really doesn't make any difference. I leave my machine on and set XP to power the monitor and HD down after 30 min of inactivity. In my opinion the drive spin up is not as bad as leaving the drive spinning for hours for no reason.
Bingo.
Heating and cooling the CPU or other parts cause microscopic expansion cracks...and when the media has only nonometers between circut traces you really DO NOT want to do this very often.
As far as HD's go I only had one die on me in the past 10 years and it was the IBM Deskstar which just stopped spinning after only four months.
I have drives that have been in constant use for 7 years and as the spinning slowly moves the surface media towards the outside (yes it happens just as window glass slowly moves under gravity) it needs to be "refreshed" to keep the data under the heads.
I use SPINRIGHT to refresh the drives two times a year.
The only time I turn one of the computers off is if I will be away a few days or to clean the dust out twice a year....or an upgrade.
The main parts failure I have ever had are with PSU's as the caps in most die after 3-4 years. I also had three Asus MB's die for the same reason and time span.
I stopped buying Antec and now use PC Power and Cooling.
I have only had one CPU fan and one GPU fan die due to dust/pet hair finding it's way to the spindle befor planed upgrades.
EDIT: Four days ago I had a short 2-3 sec power outage and one of the computers UPS failed to do it's job correctly...I ended up with a corrupted HD that would no longer boot.
I used SPINRITE on it over night and the thing runs just like new with all data intact.