In these days of jQuery (and other JavaScript frameworks) heavy websites then I can't see how it can be a problem, since it's used extensively when you use things like jQuery sliders, transitions, galleries, tickers etc. These are now commonplace and search-engines are clever enough not to blindly penalise their use.

A user RainboRick states this in the Google [Webmaster Central forum][1]:

> Merely using display:none will not
> automatically trigger a penalty. The
> key is whether or not there is a
> mechanism - either automatic or one
> that is invoked by the user - to make
> the content visible. Google is becoming
> very adept at processing JavaScript to
> find and interpret such mechanisms. If
> you use valid HTML, CSS, and
> JavaScript you have nothing to worry
> about.  


  [1]: https://support.google.com/webmasters/forum/AAAA2Jdx3sU9IJHC83yge8