Of course you can use slideshows, content sliders and all that malarkey in WordPress, or any other CMS for that matter.
How search engine friendly these types of slideshows are depend on how you implement your slideshow content.
Remember that search engine bots read your HTML. Turn off Javascript, Flash, Images, CSS, and view your page. If the content in your slideshow is there, then chances are pretty good that it gets indexed.
If you're looking to be search engine friendly, though more importantly it should read "user friendly", then do a search for "unobstrusive Javascript content slider" in your favourite search engine. Choose one that fits and integrate it into WordPress.
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