A team with infrequent conflict is a team that does not know how to handle conflict.  Here is a great example of how conflict avoidance can be disastrous.  Read about it at The You In Team

Seth Godin blogs about how conflict arises from a perceived difference in judgement, when in fact the underlying cause of a conflict may be a difference in belief. Change the belief and you change the root of a conflict. This is relevant to a team situation. We can get angry (or at least indignant) when someone that we work with seems to have bad judgement. Trying to understand the other person's beliefs may be a quick way to dissolve conflict and negative feelings that may arise. And just like Seth says the role of the marketer is to change the consumer's beliefs, it is the role of a manager to (at minimum) investigate the underlying beliefs between two team members in conflict. Understanding these beliefs will allow the team members to understand each others' perspective and perhaps lead to a successful resolution.