Thanks very much for the responses - that is very helpful. One other related question:
For the types of products that we sell, customers normally search for the product in combination with a location (normally a city - 'miami green widgets').
We deliver these widgets through subcontractors in major cities. We don't have physical locations or phone numbers in these cities.
We are creating unique landing pages for each city (approx. 50) that includes links to our major product subcategories (i.e. 'seasonal widgets, colored widgets, etc.).
We also want to create static links of each city on the right side of every page on the site, including each product page, so that for any combination of city + product ('detroit colored green widgets') there will at least be one page that has that combination of keywords on it. Since there are over 4,000 keywords representing combinations of cities / product, it's not practical to create unique content to optimize for each one.
We are working with an SEO specialist who is concerned that the listing of 50 cities on each page could be looked at unfavorably and invoke a penalty from Google. They have suggested the use of a 'tag cloud' - I don't know what this is - for this purpose instead.
I'm curious to get a second opinion on this approach!