That is how I understand it too. You can set the frequency of the GPS reporting anywhere between every 5 seconds all the way up to several hours between reportings. Which, as you imply, would greatly decrease the battery usage.

I was thinking the same thing until I considered how much juice a phone can go thru, maybe 1500 mah per day. But a motorcycle or car battery could have 20, 30, or a much higher amp hour rating, dozens to hundreds of times what a phone could use in a day. So even sitting and not being used, the battery would be able to keep the phone working for several days, if not several weeks, before it would ever deplete the battery enough that it wouldn't start. A lot of guys in the instamapper forums have had great success with this type of setup.