Hey there, I am wondering if I create a Directory style search as an alternate to the main-search (Which uses a series of options ~ where as directory will be navigation only), will I be in anyway penalised for having the 'same' content? The directory style search will also link to the main search with the options picked in the directory-style; its just my search isn't very seo friendly, so I thought if I made a directory style search it will reflect positively.
Assuming the links that eventually lead to content form your directory link to the same URLs as other methods of searching on your site you shouldn't be penalised. Search engines don't mind multiple links to the same content from within the site, as often this helps users and the search engines are all about helping users to find relevant content. What would harm your rankings would be if the directory featured the same content at different URLs (i.e if a page is in three categories, having three unique URLs to link to). Saying that, if there is a valid reason to aggregate content from multiple pages on your site into a single page, then the search engines should be clever enough to realise you aren't just content stuffing.
A general tip is just to design the page around how your users will find things, and then make only minor alterations to increase its SEO value later (i.e. moving around link anchor text, more detailed page titles, add one or two keywords).