Google put a great post up (video and slideshow too) about how Google handles duplicate content and multiple site issues.
I’ve always told my clients that Google doesn’t penalize sites and site owners for duplicate content. They just concentrate more on relevance and distinction.
As long as duplicate is legitimate and not spam (intentional manipulation) it’s valid for Google Search.
There’s a definite difference between penalties and site SEO. Duplicate content, link dilution and URL structures don’t necessarily make for good SEO.
Also, another misconception. Multiple domains hurt sites. Wrong. multiple domains are great SEO. If correctly managed.
Here’s the video.
More at Google Webmaster Central