First of all, I want to thank you BrianG for opening up this thread. And second, I hope this does not turn into a babbling mess like other thread on the subject!
I think we should take this slow, step by step... and Artur should definitely be here!
About motor braking.... on the one thread I made a while back (can't remember which one) we were discussing motor braking. My theory back then was it is a "PWM controlled motor short"... if that makes any sense? The FET switches between each phase, effectively shorting out each phase as it does this, and ultimately shorting out the motor... and we all know what happens when you short the motor phases and try and turn the rotor; it 'resists' moving. Obviously, this resistance to movement is because it is acting like the generator that it is, equal but opposite reaction in the coils (as voltage is generated) makes the motor slow down when this happens. So, now emagine this in your BL Revo truck, for instance, you are going at speed, you slam on the brakes, and the truck slows very fast.... and depending how much reverse throttle you gave it, it slowed at a variable rate. The esc is basically controlling the braking action by the PWM ('Pulse Width Modulation', for those that don't know) the FET's are conducting between each phase... the wider the pulse, the more braking effect you have. So, at what frequency does this PWM operate at? I am not totally sure, but I would have reasonable assumption that it is the same frquency the esc generally operates at (40KHz for the Quark, example).
As for the regenerative part, we have to get Artur on this, but he said it has something to do with the voltage being higher than the diode.. then ultimately higher than the battery voltage.
EDIT: I forgot to mention... that in the act of motor braking, most, if not all the energy is dissipated by the motor as HEAT.