I have no problem with people doing their own thing in my classes as long as they're safe, fairly unobtrusive and aren't wearing their own ear-buds or talking/texting during class. In fact, at the start of every class I tell them that if today is a "recovery" day for them, or they're in a particular phase of their training, go ahead and do their ride and just enjoy the music.

NSCRBUG, I would definately add more resistance when the rest of the class is doing standing runs and you want to keep your knees happier and still take part in the class. You should always be doing what feels more comfortable and reasonable to you (as long as it's not a contraindicated move).

Last thing I knew about Balley cycle classes was that their particular certification was "Reaction Cycling" which was very similar to the Schwinn cycle Certification. The thing is, most national certifications don't condone contraindicated moves. It's the individual instructors or the general atmosphere of the gym that condones and/or fosters those types of classes.