Most economists say that deflation is best avoided because it can have negative effects. One of these is that if prices are falling people will put off purchases -- the waiting will reduce aggregate demand. Much worse, deflation will cause the real value of debts to rise. This can wreck personal finances, preventing debt-laden households (and businesses) from spending (and investing). It is generally believed that this debt-deflation problem was an important channel by which the Great Depression progressed. Finally, deflation increases real wages leading employers to want to cut nominal wages -- but if wages are sticky they won't be cut and instead the above-equilibrium wages will cause unemployment.
There are counter arguments that deflation mainly redistributes wealth and doesn't have much real effect on the economy. Mild deflation, such as the US had in many years under the gold standard (e.g. late 1800s), doesn't seem to be much of a problem. But rapid deflation (e.g. 1929 to 1932) can be a huge problem.
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