IMO, this all depends on a creatures' intelligence. I believe that the more intelligent an animal is, the more developed their brain and central nervous system is, the more they generally have the ability to experience and realize suffering, both physical and psychological.
Insects have tiny brains and practically have no thought process. If they are suffering, I doubt they'd realize it much. Instinct would control almost everything. That doesn’t mean it’s OK to torture them, but I certainly don’t lose any sleep over it. Things like corals and anemones, I believe it’s impossible to be cruel to them. (There is however the ethics surrounding the preservation of wild-caught specimens and the resulting impact on the environment.)
Fish have larger brains than bugs. I don't think it's OK to be cruel to them if you can avoid it. If you eat fish, make sure they're killed quickly. If you keep fish, do your best to care for them. If you have an accident, it’s just that, an accident, and you shouldn’t beat yourself up over it. But people who purposely don’t care and mistreat their fish should be ashamed, whether they’re vegetarians or not.
Mammals I think we should treat them well. Cruelty to mammals is immoral, IMO, and that’s why I eat only SPCA-approved meat. Even within mammals there are varying degrees of intelligence, from rodents to cats to monkeys to humans. Humans, the most intelligent animal of them all, we should treat the best. A human can suffer in a way a mouse never could.
So basically I put all animals on a sliding scale.. It's not based on how cute they are.
Another determining factor of when cruelty crosses the line is how justified it is. Is the animal for food? Is it for self-defense? Is it an accident? Do you have any choice? If you hit a cat a cat with your car, that’s not cruel… it’s an accident. However, if you leave the cat there to slowly die and suffer, then you cross the line, to be sure. Another example… eating animals for food in itself isn’t cruel assuming they’re killed quickly. Being unreasonably cruel to the animal before slaughtering it for food, however, is just plain wrong.
It's a complicated subject with many determining factors. It's not as black-and-white as some people think. If it is black-and-white then humans are animals too, so killing a person is just as bad as stepping on an ant, and we all know that's not true.