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Thanks,
Shawn
I have a dealer locator on my site, and it is not penalized for duplicate content. Each state dealer page is listed with the search engines. However, the dealer names and addresses are different, so the content is more different than what you would be working with.
I would suggest changing more than just the state name if you can. Make the pages as unique to the state as possible. I don't know what your project is, but for instance, you could list different capital cities, state mottos, state birds, etc... More work, but worth it b/c you get more traffic, and most of all it benefits your user b/c the state pages are unique, and not just cookie cutters.