ORIGINAL: RCKen
Cycling will tell you the capacity of the battery pack. When a pack is new it should be cycled to determine it's initial capacity, and that should be recorded. Then throughout the life of the battery it can be cycled to see how it's capacity is faring. When a pack drops to about 80% of it's initial capacity I will usually take it out of service and put a new pack in. Cycling the battery after a long period can tell you what the capacity of the pack is.
Most chargers that can cycle will allow you to set the discharge rate for the discharge cycle. This will allow you to set a discharge rate that is realistic to your real world flying. Doing this will spot dead cells and other problems as the pack will quickly discharge.
Ken
What most newbies may miss in the above, is that you need to have some way of MEASURING the amount of current over time, the batteries provide after or during the cycling process.
Most newbies have typical "wall wart" chargers that do not produce any type of reporting.
RCKen is talking about rather "intelligent" chargers that report the amount of current put back into a pack during a charge cycle, and are often also capable of determining how much current over time is withdrawn as the pack is run back down.
So given his recommendation, if you have a 1000mAh pack, then cycle it using an intelligent charger, and the charger reports that it can only draw the battery down by 800mA, it is time to replace that pack.
I've seen newbies with packs that have a bad or weak cell, who have cycled their packs with a wall wart charger, checked them with a load meter, only to find their plane looses control after a few minutes in the air.
Servos can put a substantial load ( 2A PER SERVO is not uncommon, at stall !!! ) on the packs.... Problems may not be apparent without a decent test...
So a decent computer controlled, charger/discharger/balancer is an IMPORTANT investment.