Keeping a CD in the drive

Don't think so. Sometimes I leave a cd in for days, whether actually using it's contents for an ongoing project or simply forgetting that it's in there (and ignoring the icon) and nothing goes wrong with either the disc or the drive.

No. However, if it is a bootable CD, you might find the results on reboot to be inconvenient.

Apart from what the Big Bird pointed out, it's no problem at all. I'm a video game fanatic--i commonly leave CD's in the drive. Since i'm lax about putting them back in the case, that probably serves to protect them.

The only possible drawbacks I can think of are the one Timber mentioned and that you may notice some sluggishness in your system with a CD in the drive. The OS will occassionaly check the drive and inventory it's contents. When it's doing that you might notice that your mouse or keyboard isn't as responsive as it normally is.

It should never cause any damage though.

Keeping a CD in the drive
I just rhought of another objection - forgetting you have a CD in the drive and putting another in on top of it. Makes a horrible noise, and I doubt that it does either CD any good.
(It happened to me once.)

Ouch !
Yeah, that won't help.
It'll scratch one of the disks possibly beyond recovery.

I leave disks for games I'm playing, such as Dungeon Siege 2, in one of the drives for months and it doesn't do them any harm.