Here is the basic breakdown of the penny debate.  This is a synopsis of this article on About.com. 

Yes Penny

• Prices go up because everything will get rounded up, not down.
• Poor people make more small purchases and so will be burdened most heavily.
• Lots of little charities rely on people's willingness to give away pennies.
• No pennies means more nickels.  They cost more to make than pennies.
• Nostalgia. Sentimentality. Change is hard (no pun intended.)
• Lincoln.

No Penny

• Because they have no value as currency.
• They cost more to make than they are worth.
• They waste time. We average 2.4 hours per year handling pennies or waiting for someone else to handle pennies.
• Making enough pennies takes the Mint as much time as making all the other coins combined. 
• They cost a lot of money to transport everywhere for something that isn't worth anything.
• Rounding up will only cost us cents to the transaction.  We don't value cents.