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 states this in the Google Webmaster Central forum:
"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. Good luck!"
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