Duplicate content advice

[jonny512379]

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

[dmccarthy]

duplicate content is more likely to be affected by Panda updates not penguin updates. Even though you have not experienced any issues todate I would definitely reduce the duplicate content to a min. Otherwise you may be penalized in the next panda update.

[jonny512379]

Ok i will see what can be done about the duplicate content.

Will adding META NOINDEX, NOFOLLOW to the empty directory pages i have, cure any problems that Google may have? (will NOINDEX also stop these pages from showing as duplicate content in SEOmoz, or will they still be shown?)

I have also spotted that several of the duplicate pages are due to www and non-www
So i have updates the settings in Google WebMaster Tools to only list www and also added a .htaccess 301 redirect so all users are directed to www. 
Is this the best thing to do?

Thanks
Jon