Google sees a page for every item you list in your shop, and I found it was in Google very quickly. There won't be any SEO disasters if you set your shop up correctly.
Sitemapper has improved this again for me, and very quickly I may add, plus Yahoo & Bing has improved quickly with Sitemapper too.
Assuming it's done correctly, it won't matter how you list your products, as cart creator creates a page for each product. Utilize the built in SEO for improved search results too.