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This works and is quick/cheap to do. The much better options is a well written page on each area. This way each page is 100% optimised for the keyword and contains useful, local, relevant information. Start with the largest areas (on search volume) and add a few more pages each week/month. If you have a list of areas as large as this then use slightly larger areas and target the big town for the page but also make references to the smaller villages within that page. Means the higher volume is well optimised and the lower volume pages are semi-optimised on a relevant page. Interlink each of these pages to 2-3 of the others to create low OBL, relevant, varied, internal linking - rather than a single page like above with links to all of the pages.

Great resource from Seer Interactive http://www.seerinteractive.com/blog/google-scraper-in-google-docs-update

Alan response is great, but if by any chance you are using wordpress and want to migrate to a new permalink structure I would recommand this plugin. This will allow you to change your URL structure and put in place de redirections for one another.

Google wouldn't waste budget. It just means they will have to consider crawling more internal links for a page.

I share Alan's hesitation - it could look like cloaking, especially if a bot is making the call. If the pages aren't indexed yet, you could just "nofollow" the links - it sends the same signal transparently. Home Depot is probably pulling it off with the AJAX/JS implementation, which is a bit harder for Google to parse. They also have a massive authority and link profile, so they can always squeak the small stuff by. You might not be so lucky. In general, it's best to stick to the standard practices and not get too tricky.

To be fair to Highland, I do think canonical is a good bet here, but I just have to comment that I don't think Google handles these kinds of URLs very well. They should, in theory, but in my experience they rarely do. The problem with order variants is that you can easily spin 100s or 1000s of them and create serious indexation and ranking problems. For this particular example, the canonical tag is probably best, but there may be cases where certain parameters have no particular value (like a "sort by" parameter). Those are sometimes better off blocked. I cover a bunch of examples in my mega-post on duplicate content: http://www.seomoz.org/blog/duplicate-content-in-a-post-panda-world

Your answer in under 2 minutes from Matt Cutts: http://www.youtube.com/watch?v=Qigo05nAqKw

I would also take the time to clean up your XML Sitemap file for crawling, just in case. It'll be better for you to keep track of any files/URL's you don't want indexed by the search bots. Just good practice