Back in september my primary site (www) dropped off google apparently due to duplicate content. My server manager changed the 401 page to automatically redirect to the index for non-existing pages. (thus I assume making google think I had the same content on many pages)
What I did was make a subdomain which content wise is different but is optimized for generally the same keywords. After adding links to it from the www site and a couple of others it almost immediatly had the same page rank and google positions.
What will happen when the penalty is removed or reviewed or whatever is supposed to happen after 6 months or so. Will both sites be penalized will the original remain as supplimental or will both have ranking. And if the worst could happen what should I do to fix it.
If the content is is truly different on the new site, then I think both would rank together for a while. If you had the top result for one, Google will eventually combine other high-ranking listings with the top result, showing you various sub-pages along with a "More results from www.mysite.com" link.
If the original site does come back (don't be so sure it will happen), and ranks, then I would consider moving the subdomain to a new site via 301. It's nice to have two sites ranking!