You need to put quotes around the first argument in that function.... should be:
<select name="discount" class="formtextfields" id="discount" style="width:184px" >
<option value="" <?php if (!(strcmp("", (ValidatedField("addcustomer_036","discount"))))) {echo "selected=\"selected\"";} ?>>Please Choose</option>
<option value="1.05" <?php if (!(strcmp("1.05", (ValidatedField("addcustomer_036","discount"))))) {echo "selected=\"selected\"";} ?>>1.05</option>
<option value="1.30" <?php if (!(strcmp("1.30", (ValidatedField("addcustomer_036","discount"))))) {echo "selected=\"selected\"";} ?>>1.30</option>
</select>