In colorado, the standard that allows you to draw (brandish) a afirearm is the same that allows you to use deadly force, so if you have reason to draw by definition you have reason to fire.
For many reasons stated here warning shots are a bad idea. And for the average civilian, depending on local laws, unless the BG turns immediately (and I mean IMMEDIATELY) and runs away, just shoot him.
This has also been stated around this site by some, but one thing a lot of people don't understand is that while you might feel safe holding your piece on a guy 8 or even 10 feet away, it's amazing how fast a desperate person can react. If he decides to move on you you might/might not get a chance for only one shot. And since he's moving, you might miss. Or if he's on adrenalin or drugs, he might now notice he's hit right away. Now he's got your gun.
I know when I'm watching movies and the good guy has the bad guy at gunpoint, and the bad guy keeps moving forward until he can strike, I get really pissed off; learn the lesson from Hollywood -- if you have a BG at gunpoint and he's not immediately acuqiescing to you or running away, neutralize the threat before he gets your gun and neutralizes you.
My .02.
BTW -- technically it is pretty safe to fire a gun STRAIGHT into the air. When the slug comes to a complete stop and starts to fall, it falls with no more energey than a slug dropped from that height. And because of air pressure it reaches its terminal (maximum) velocity very quickly. That said -- the terminal velocity of a heavy slug of aerodynamic lead could be sufficient to do some bodily harm.
Whenever you see those arab wedding parties shooting AK's straight into the air, a few seconds later the lead starts coming down on them. Nobody generally gets hurt.
now firing your gun anything other than straight up, like at a 45 degree angle ... in that case the bullet will has some pretty good trajectory on it when it comes back down and can definitely still hurt someone. Seems like every year there's somebody killed by a freak bullet fired at a high angle a couple of miles away.