Well, to add some more to this, there are different kinds of nationalism. I think you can roughly divide them in two camps. The kind of nationalism that promotes nationalism based on the idea of exclusion and thus becomes xenophobic at some point, and the kind that doesnt. Id say that America for a long time is the perfect example of the second kind. The American ideal has always been that it was open (I realize that this wasnt always practically the case) for everyone to start their own life and make something out of it. It didnt matter where you came from. And the result is telling. You have English, Irish, Germans, Italians, Christians, Jews, Muslims, etc, all saying that they are American first but they also keep a large part of their cultural background, without these two loyalties coming into significant conflict with each other.
Unlike in Europe at the moment, where we are going once again back to the exclusive/xenophobic kind of nationalism.
Still, Id argue then that one half of nationalism then is relatively harmless, as it doesnt preach the superiority of one group over the other.
Im curious though, how do you think that the creation of a nation can be done without the use of nationalism? The whole idea behind nation creation basically automatically falls within some form of nationalism...