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Hello All I'm hoping for some opinions as i am confused as to the best action for me to take. The problem:
Although i say the below, we have never been penalised by Google, not taken part in any bad link building and don't do too bad with SERP. but i worry Google may not like what i do these days. We have one main site that is broken down into areas/cities (i,e London, Manchester, etc) so the domain looks like www.domain.co.uk/London But in addition to this we also use Sub-domains to target popular areas (i,e. http://London.domain.co.uk). 
These sub-domains take the content from the main site but of course only display results relevant to London and are optimised for "London + Keyword" 
Any page that gets duplicated (i.e London.domain.co.uk/profile123 and www.domain.co.uk/profile123 are ALMOST the same content) we add a rel="canonical" link that points to the main domain+page on www.
All these sites have a large amount of links back to www.domain.co.uk/?Page so the user can also search in other areas other then London, etc. This method has worked well for us and is popular with both users and Google search results. All sites/sub-domains are added to GWT under the same account and all sites have unique sitemaps. I do however worry that Google may class this as link manipulation owing to the amount of links pointing back to the main domain and its pages (this is not the reason we use the sub-domains though) In addition to the above sub-domains we have a few domain names (5/6) that are keyword rich that we also place the same content on (i,e www.manchester-keyword.co.uk would show only content relevant to Manchester), and again these sites have links back to the main domain, so users can navigate other areas of the UK. I worry that these additional domains may also not be liked by Google What do people think? I have started to reduce/replace some of the additional keyword rich domains with sub-domains from the main site and then 301 the keyword rich domain (i.e. www.manchester-Keyword.co.uk now goes to http://Manchester.domain.co.uk) as i feel sub-domains may not be penalised as much as unique domains are.
There are domains that i dont really want to 301 as they bring in good amounts of traffic and users have bookmarked them, etc. Any opinions or what you think i should do would be great, as i really worry that if Google stops giving us good results, i'm in real trouble. Although im not sure if what we do is wrong with Google or not.

What is the best way to stop duplicate content warning (and Google classing them as duplicate content), when it is caused by CAPITALS (i.e www.domain.com/Directory & www.domain.com/directory ). I try to always use lower case (unless a place name then i use Capitals for the first letter), but it looks like i have slipped up and got some mixed up and other sites will also be linking to Capitals Thanks Jon

Im looking for a little advice. My website has always done rather well on the search engines, although it have never ranked well for my top keywords on my main site as they are very competitive, although it does rank for lots of obscure keywords that contain my top keywords or my top keywords + City/Ares. We have over 1,600 pages on the main site most with unique content on, which is what i attribute to why we rank well for the obscure keywords. Content also changes daily on several main pages. Recently we have made some updates to the usability of the site which our users are liking (page views are up by 100%, time on site us up, bounce rate is down by 50%!).
However it looks like Google did not like the updates....... and has started to send us less visitors (down by around 25%, across several sites. the sites i did not update (kind of like my control) have been unaffected!). We went through the Panda and Penguin updates unaffected (visitors actually went up!). So i have joined SEOmoz (and loving it, just like McDonald's). I am now going trough all my sites and making changes to hopefully improve things above and beyond what we used to do. However out of the 1,600 pages, 386 are being flagged as duplicate content (within my own site), most/half of this is down to; We are a directory type site split into all major cities in the UK.
Cities that don't have listings on, or cities that have the same/similar listing on (as our users provide services to several cities) are been flagged as duplicate content.
Some of the duplicate content is due to dynamic pages that i can correct (i.e out.php?***** i will noindex these pages if thats the best way?) What i would like to know is; Is this duplicate content flags going to be causing me problems, keeping in mind that the Penguin update did not seem to affect us. If so what advise would people here offer?
I can not redirect the pages, as they are for individual cities (and are also dynamic = only one physical page but using URL rewriting). I can however remove links to cities with no listings, although Google already have these pages listed, so i doubt removing the links from my pages and site map will affect this. I am not sure if i can post my URL's here as the sites do have adult content on, although is not porn (we are an Escort Guide/Directory, with some partial nudity). I would love to hear opinions

Hi All I have just joined on the trial offer, im not sure if i can afford the monthly payments, but im hoping SEOmoz will show me that i also cannot afford to be without it! In my proses of learning this site and flicking through each section to see what things do. However when i enter my URL into Site Explorer i get the following message "No Data Available for this URL" My site should be crawl-able, so how do i get to see data for my site/s. I wont post my URL here, as the site has a slightly adult theme.
If anyone could confirm if i can post "slightly adult" sites. Best Regards
Jon