Extremely annoying JavaScript array/object error

You can convert the arguments object into an array like this:

var argsArray = Array.prototype.slice.call(arguments);

What this does is use the slice method common to all arrays via Array.prototype to create a genuine Array object from the array-like arguments. call() (a method of all functions) is used to call this slice method with a this value of arguments and no parameters, which has the effect of copying all of the elements of this into a new array. This may seem devious or hacky but it is actually designed into the language: see the note at the bottom of section 15.4.4.10 of the ECMAScript 3rd Edition spec.

Also, within a function you are provided the arguments object as a variable, so you don't need to access it as a property of the function object as you are doing. In your case, just use arguments rather than panel.arguments.

that minus one in for loop was not good. removed it, and worked like a shawm

You could keep it much simpler (cleaned up your formatting, semi-colons, etc.):

function panel() 
{
    var panels = Array.prototype.slice.call(arguments);
    var displayMode = (panels[0] == "collapse" ? "none" : "");

    for (var i = 1; i < panels.length - 1; i++) 
    {
        document.getElementById(panels[i]).style.display = displayMode;
    }
}

Also, if you're rewriting your application, it might be a good time to consider using things like jQuery. You could assign each one of your panels a certain class name, and reduce your code to something like this:

function panel(hide)
{
    $('.className').css({ display: (hide ? 'none' : '') });
}

which you could use like so:

panel(true); // or
panel(false);

Or, because now it's so syntactically simple, you might as well just create two separate functions so that your code is straightforward and you know exactly what it's going to do from the function names alone:

function showPanels() {
    $('.className').css({ display: '' });
}

function hidePanels() {
    $('.className').css({ display: 'none' });
}

And finally, if you don't worry about doing it via CSS, you could really shorten your script to this, which can't be any clearer:

function showPanels() {
    $('.className').show();
}

function hidePanels() {
    $('.className').hide();
}

Cheers!