Is geo-targeted content "ethical"?

Hi,
We were debating on how to best serve up geo-specific content using server-side geo-ip functions.

We agree here that directing the user to a geo-specific URL would invoke a duplicate content penalty, because it would essentially be the same site at 2 separate URLS and with only minor, and sporadic geo-specific content changes.

The approach we took was to work with one URL and then serve up specific includes and macros that display blocks of content based on geo-IP. It also makes content managemenet easier because we only have 1 URL to maintain and the content within it.

Is our approach the best approach or would it be flagged for penalty because we are using 1 URL to display variable content based on one's geography. Thanks