The penny is useful to keep around. It's one of those things that would be difficult to phase out of existence. Prices would rise; merchants would round up rather than round down, most likely and cause every day items to be more expensive. On the other hand, pennies are heavy and a pain to carry around.
We have no need to have pennies. We should get rid of pennies and just ensure all prices end in 5's of 0's. It make it much easier and be one less currency we need to worry about. It would also save the government money from having to produce the pennies.
The penny is now worth less than the materials being used to make it. With inflation the penny is becoming less and less valuable so this issue is only getting worse. By taking the penny out of circulation, we will be mitigating future losses that are caused by spending more money than what is being generated.
I do not think that pennies are useful in cash transactions. The practice of rounding cash dues up or down (depending on the amount) is already being used in Canada, for example, due to the high cost of producing the 1-cent coins, in comparison to the gains that having them would yield. The metal of which these coins are made are worth more than its face value, in addition to the cost of producing and circulating them.