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Adding to Daniel's comment, I'd say the big difference "...through our faceted search." It's important to have both the XML entries and a crawl path. An XML sitemap may be enough to get the pages indexed, but they won't inherit any internal link-juice. That comes through your internal links. Somewhere, there needs to be a link that Google can crawl to the other cities. The direct back-links will help, and should get you indexed and possibly ranking, but you're still losing the authority from the domain as a whole that you'd inherit via internal links. The upshot is that you'll lose ranking power.

I generally trust Duane, so I'd take it at some value - I just haven't seen that problem pop up much, practically. Theoretically, you'd create a loop - so, if it leaked, it would keep looping/leaking until no juice was left. That seems like an odd way to handle the issue. My bigger concern would be the idea that, if you rel-canonical every page, Bing might not take your important canonical tags seriously. They've suggested they do this with XML sitemaps, too - if enough of the map is junk, they may ignore the whole thing. Again, I haven't seen any firm evidence of this, but it's worth keeping your eyes open.

Yup, helps!  Thanks.

Excellent.  That's what we'll probably end up doing.  Egol and Alex, thanks for the responses.

Hi Atul, Different languages is NOT seen as duplicate content. If you take the same article and present it in both English and Spanish, that would be considered two unique articles.

You're welcome Randy, am glad to have helped The Pro Tools are excellent, the guide should help to get the most out of them. Work through it in whatever order seems logical and most apt for your site. Regards Simon