I don't understand why you need the hidden input. Just set the default option in the <select>
to the value that was posted.
<form action="page.php" method="post" id="pagination" name="pagination">
<input type="HIDDEN" id="pageno" value="" name="pageno">
<select style="border: 2px outset rgb(204, 51, 0);" size="1" name="mydisplaylimit" id="mydisplaylimit">
<?php
$default_limit = isset($_POST['mydisplaylimit']) ? $_POST['mydisplaylimit'] : 5;
foreach (array(5, 10, 20, 50) as $option) {
?>
<option value="<?php echo $option ?>" <? if($option == $default_limit) { echo "selected"; } ?> >
<?php
}
?>
</select>
<input type="SUBMIT" value="GO" style="border: 2px outset rgb(204, 51, 0);" class="form_enter">
</form>