For Freud, denial was a defense against external realities that threaten the ego, and many psychologists today would argue that it can be a protective defense in the face of unbearable news, like a cancer diagnosis.
In the modern vernacular, to say someone is "in denial" is to deliver a savage combination punch: one shot to the belly for the cheating or drinking or bad behavior, and another slap to the head for the cowardly self-deception of pretending it's not a problem.
Yet recent studies from fields as diverse as psychology and anthropology suggest that the ability to look the other way, while potentially destructive, is also critically important to forming and nourishing close relationships...And it is these highly evolved abilities, research suggests, that provide the foundation for the most disarming of all human invitations, forgiveness.
Michael McCullough has written what sounds like a fascinating book - The Evolution of the Forgiveness Instinct, discussed in the article. Much of the research written about in the article looks at the balance between unreal idealization and the necessary social guides of tact and taboo - unhealthy lies or greasing the wheel?