dvb..
my first reef was a 55g. i had a multicolor, flame and potters. the multi basically was the boss. chased everything it thought it could intimidate, and initially nipped clams and various lps relentlessly. a major aggitation for me. after a while, it didn't bother the clams or corals. i now have a 300g almost entirely sps, but a few softies too (brains, blastomussa, leathers, zooanthids, wellsophyllia etc). multibarred, multicolor, venustus, flame, and colini are all in there now. i've spent hours observing them to make sure they don't eat anything they're not supposed to, and they don't. maybe since there's close to 600lbs of tonga LR they don't bother the clams/corals. i have a purple tang which is the 'boss, and an emperor and a goldflake angel in there also who aren't intimidated, so they seem to keep the multicolor in check. the colini, venusta and multibarred are rather shy, but do come out once they feel more secure.
if you're going to get more than one, and/or especially one of the more 'reclusive' species, make sure there's plenty of hiding spaces, you don't have aggressive tank mates, and you add them first so they can get comfortable. however, i would consider adding a multicolor later on since it tends to be quite aggressive. unless you're expericenced, i would avoid delicate species like colini, multibarred, and venustus etc. personally, i think the flame is the way to go...great color, relaxed attitude, likes to be in the open, and will eat flakes/pellets.
as for physical damage they cause, i haven't seen any actually 'eat' a coral. polyps don't appear to be missing after they nip at it like some of the non-pygmy angels might do. however, if they harrass clams enough, the clam will not expose it's mantle enough during the day to get the required amount of light it needs and could therefore die. keep in mind tho that once it goes in, your pygmy isn't coming out alive.
hope this helps,
Doug