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I personally have never used my MBP closed because I don't have an external display for it and I dont listen to my music from it when on the move (thats what iPods are for :p). The only thing I have heard people complain about with having the lid closed especially with the new MBP's is the laptop seems to heat up a bit faster and stay a bit warmer, but in reality I can't see any down sides to it.

If it were me though I would just keep the MBP on a stand next to the display and use it as a dual monitor setup. My $.02
 
Here is my setup. As you can see I have the keyboards covered with Radtech so that the doesnt get on the keyboards.

Setup_Side.jpg

Setup_Front.jpg
 
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