We use "%20" all over the place on our website and have not experienced any negative effects. We began doing this about two years ago, and at that time a few search engines had problems, but they have since disappeared. Some browsers will display a "%20" in the address bar, while others will display an empty space, but this really doesn't matter.
We're not so sure though that this has any positive effect on ranking, though it definitely has no negative effect. The thing to remember about Google is that while having a keyword as part of the base url, such as www.greatwidgets.com, is very helpful, using keywords as part of the page url, example: www.myexample.com/widgets.htm does not appear to result in any advantage. What matters is the page content and how many other pages out there have the exact same content. Also, incoming links from relevant websites with high rankings, without the rel="nofollow" tag are extremely important.
You cannot "trick" Google with fancy-looking URLs and h1 headers. That's right, h1 headers mean nothing, because Google doesn't require your input to tell them what's important.
Remember, if you're selling products and copying content from the manufacturer's website (or the competitor's website), Google's PANDA is going to be very angry. You'll need to reword your content so that it's not a verbatim copy from some other website. Google rewards originality, and severely punishes plagiarism. Seriously, PANDA will put the offending page on page 50 until it's brought into conformity with Google's policy on duplicate content.
Always use sitemaps to help the search engines.