Usually the battery pull is a last resort because you cannot turn your Droid off to reboot it. And yes, you literally take the battery out, wait about 10 seconds, then put it back in and try again.
If you can turn your Droid off, you don't need to pull the battery. Pulling the battery won't do anything better for you than just turning the Droid off.
If you can turn your Droid off, you don't need to pull the battery. Pulling the battery won't do anything better for you than just turning the Droid off.