I.O.
My son is 36 month and still uses his pacifier only for sleeping. Since he was potty training we decided to hold off a bit before we took it from him. The pediatrician said that it wouldn't really effect his teeth unless he still had it at 4-5 yr's old. My daughter, who is now 8, also used one and I was able to take it away from her very easily at 3.5 yrs old. She never even missed it.
My sister-in-law gave me a hard time about using them but her daughter sucked her thumb and consequently needed braced as a direct result. It's easy to take away a pacifier, not so easy to take away a thumb. I think if it's used only for sleeping it's not that big a deal and all kids are different. Both my kids sucked their thumbs in the womb so I knew they were going to need something and I didn't want them to suck their thumbs.
Oh & BTW a good trick to get them off of it when you are ready is to cut the tip off of the pacifier. This will eliminate the sucking sensation. So the child will still put the pacifier in their mouth, won't know what has changed and will not want to use it anymore.