So I had fully charged my battery last night, then i played around with wifi for a little bit and then that was it. I closed it and put it on my nightstand and went to bed. The next morning I wake up and it won't even turn on, I had to remove the backcover and battery and once it started up it said that battery was completely dead.

I don't understand how this could have happened as it wasn't touched for the past 10 hours? Anyone know any reasons this could have happened and how to prevent it??

I had read a post earlier that said that if i used a picture as my home image it would drain my battery but thats not the case as i'm using one of the sample pictures.

Did you have any applications running in the background?

This link may help.

Maximum Battery Life - BlackBerryFAQ

I closed every appliction that I was using and didn't leave anything on. My usage of the phone hasn't changed in the past four days when i first got it and this is the first time this has happened.
I was considering doing the OS upgrade, i dont even know which upgrade I have right now, but I'm afraid it'll make things worse with some other people's reports.

Three possible culrpits :

The charger.
The battery.
The phone.

Try the least expensive option first-a different charger. If that doesn't correct the situation, try a different battery.

You mentioned using WiFi - I suspect you left it on overnight. The WiFi radio consumes significant battery power. If you are receiving a strong WiFi signal, or receiving no signal at all, then power drain is reduced somewhat. However, if your Flip is right at the boundary of a WiFi signal, the phone will be constantly transitioning in and out of Wifi mode, which will drain the power pretty quick.

I recommend only turning on WiFi when you need it, then turn it off.

since when did you buy the device? (and was it new)