I've seen those threads too but i'd take them with a pinch of salt, i've not seen anyone come up with any reliable evidence to say that using city mode too much has caused any damage to their car.
I have city mode on half the time anyway. Half my time is spent getting through commuter traffic in cities or I have it on when going to down the bendy country lanes where I live and its been absolutley fine. I have had other electrical issues but they are in no way connected to having city mode turned on (One issue was caused by a burnt wire behind the dash and the other was a blown resistor for the heaters)
EDIT: But it is worth pointing out you dont need city mode on all the time, once you start really moving you dont notice the difference anyway