In our (screwy) legal system, it's important to start with a high bargaining point so you can get a higher settlement. People want to avoid court because it's never a sure thing, and if you're settling out of court, starting with $20 000 000 means you're much more likely to get $100 000 than if you start at wanting $200 000.
Not really. A defendant company will assign a dollar value to a case, regardless of the amount which is sued for. They'll settle for that amount because either that's what they assess the damages to be, or they assess that's how much it will cost to defend the case even to a favorable judgment. They won't modify their calculations based on how much the other person demands because frivolous demands only hurt a case in the eyes of both the judge and jury.