Yes, every things still working after this modification, you can switch OFF the screen, switch ON, ... the only différence is that the screen always switch ON automatically when you put the power supply ON.
My Lilliput isn't here yet, but I was already thinking of how to solve this problem with a micro relay. I like your circuit better though!
If I understand it right, the common node between the resistor and capacitor is briefly pulled down to ground when the power is first applied. Once the capacitor charges, the point is pulled up to 5v through the resistor.
One thing confuses me though, what is the point on the other side of the resistor that was removed? Isn't it also 5v? If so, wouldn't it be possible to build your circuit without removing the surface mount resistor? I'm probably confused. Feel free to slap me.