CPU at 100% for a long time - Harmful or not? On my 2010 MBP, I want to encode several hours of video, which will end up with the CPU used at 100% for a long time and the MBP heating quite a lot.

Is this considered as normal use (I would say yes, isn't it what computers are made for! :)) ? Could it end up with a too high internal temperature and could it damage some components? (The aluminium case will be hot but the hand is not a good thermometer).

In case this could be a problem, is there a way to cap the maximum cpu% a process can use. I don't really care about the time it will take, I just don't want to kill my MBP...!
100% CPU utilization will not directly be harmful to your laptop.  Heat, however, can be.  Your MacBook Pro does have several internal temperature sensors that will turn on the internal fan and finally halt the machine should it get too hot.  You can see the temperature each sensor is reading by using this free program:

http://www.bresink.com/osx/TemperatureMonitor.html

You should still use some type of cooling stand if possible.  My 2007 MacBook Pro suffered a broken display from what I believe to be a heat related issue.  After heavy use and high CPU utilization the bottom of the display would get very hot.  Then, the screen would start to flicker slightly (but only when the laptop was running hot).  Eventually, the screen had to be replaced.  Using a laptop stand with multiple fans kept my machine running cool enough to prevent the issue from happening again.

Also, you do have some control over how much CPU a process gets.  For that you can use BeNicer, another free piece of software:

http://frozenheads.com/page/benicer