 
Luke 16 talks about the rich man and Lazarus. Matthew 25 talks about 
the eternal fire prepared for the devil and his angels. Revelations
20 and 21 reference this fire as the place where unbelievers are
thrown. Matthew 18 talks about being thrown into the eternal fire and
the fire of hell. It seems quite clear that there is this place where
a fire burns forever. From the Revelations passages it is clear that
the devil and his angels will be tormented there forever. From the
Matthew 25 passage it doesn't seem abundantly clear whether the
punishment of unbelievers is everlasting in the sense of final or
in the sense of continual. 
 
From Dale's question, I come away with the suggestion that hell,
if it were short, might be an acceptable alternative to living
forever with the Source of Life, Peace and Joy i.e. the 
unbeliever ceases to exist. Whereas, if punishment goes on
continually, then one should have a greater motivation to avoid it.
It definately seems to me that hell is something we want to avoid
regardless of its exact nature. 

There seem to be two main questions in Dale's thought:
What is God's main plan on earth?
Why is continual punishment a necessary part of hell as opposed
to simply destroying completely those who refuse God?

I believe that God's main plan is to have a genuine relationship
with people.

The nature of hell and the reasons for its nature seem a lot more
difficult to ascertain. It does seem clear that hell is something
to avoid. At a minimum, hell is the state one is in when one has
nothing to do with God.

In the Bible, I am not aware of any discussion about the specifics of
hell beyond the general of hot, unpleasant and torment. For instance,
it is not discussed how (if at all) the rich man can
continually stay in the fire and still feel discomfort or pain or
whether there is some point at which the pain sensing ability is
burned up. If you can forgive the graphicalness, if you throw a
physical body into a fire, assuming the person starts out alive,
at some fairly quick point, the nerves are destroyed and pain is
no longer sensed. It is not stated what occurs when at the judgement,
the unbelievers, (who are already physically dead) are cast into hell
i.e. they no longer have a physical body so they can't feel physical
pain. What could be sensed continually is that those in hell are
to be forever without God. 
 
The Lazarus/rich man parable is told with the idea of having the listener
think in physical terms in order to get the point that some people
won't listen to God even after he rises from the dead. The point of
the parable is to reach the hard-hearted here who are not listening
to the fact of the resurrection nor the Gospel about Jesus Christ.
It seems reasonable to also draw from the parable that hell is
not even remotely pleasant.