Hi bmmongtaggo, I have not experienced this problem yet and since I implemented URL re-writing in one of our stores, it became and and maintain number 1 on www.google.dk search index.
The problem I can see witn URL Re-writing is when you use this without care into an exsiting website which has considerable good page ranks. Implement url rewriting can cause the search engine confused on which page to look for a particular keyword into your site. For instance, the original website you upgraded into ASP.NET has the page http://www.mystore.ph/products.php?product_id=1001 whch shows a Philips Flourescent Lights. This page maintains top rank in the search engine index. Apparent, you would like to implement url-rewritign into your product pages and convert the said page into http://www.mystore.ph/products/phiilips-flouresent-lamps.aspx. This is really cool and surely add your philips products in to the search index, but... you forgot to mark old page as non-existent and there's new page for the product. This is the problem! You now lost your position and the new site grows older and older.
A way to fix this problem is to issue a permanent redirection (aka. Error 301) when those old pages was requested. Why? When you upgraded your website, the pages it wont appear in the search results right away, it will take some time before it gets refreshed. IF you use http://siteexplorer.yahoo.com, you will see old pages are returned and not the new web pages. When users search and linked into your new website, user will be lost and Error 404 will be issued whicn in turn puts your website in bad fate in page ranks.
Hope this helps.
Rodel E. Dagumampan
Software Innovator, Technology Evangelist, Aspiring Entrepreneur, Farmer, Runner, Risk-Taker