We had the same problem - here's the solution (that worked for us anyway).
Create a new expanded view template, based on the original tmp_product.htm file. But remove any reference to the order button. In this file add in a message that says something like "this item has either been discontinued or is currently out of stock". Keep any cross selling you may have as this will help seo.
Then open shopexd.asp and locate Sub GetTemplate. Just before the end sub enter this code:
if tmpRS("hide")<>False then
template="THE NAME OF YOUR NEW TEMPLATE"
end ifThe beauty of this system is that it keeps your discontinued pages available for search engines to spider so helping your internal link structure whilst explaining to a user why they can't buy the product (instead of creating a 404 error page).
For an example of how this works have a look at this page (remember we sell adult toys) - http://www.temptationsdirect.co.uk/x/11831/Buy/Wiggle-Wand.html
Hope this helps.
Forgot to mention. If you search G for "top cat wiggle wand" (which is what this roduct is) we still come up at 7th.
Sex toys from a UK sex shop including vibrators and dildos.