Some stats and actual experience. I bought 14 expired domains in late December and early January through sites that auction & register expired domains. I guess many of us are familiar with such sites/registrars.
Out of the 14 domains 6 were PR5, 7 domain were PR6 and 1 was PR7 at the time I bought them.
PR5 domains: At present 5 out of 6 domains are PR4. 1 domain that was PR5 in late December is now PR0.
PR6 domains: 3 have PR4 now, 1 has PR5 now, 1 domain has retained its PR6, 1 domain is PR0 as on today and one domain has seen upgrade to PR7 from PR6.
single PR7 domain: Current status PR6.
All the domains have one thing in common that all of them were put in use with 2-3 page sites as soon as their DNS updated after I received the domains in my account. Such temporary sites were replaced by another set of small sites that were on topic to area of my interest in another 2 weeks. My purpose of such domains is to get PR quickly for my new sites built on valuable domains. I will delete links from expired domains as soon as I have sufficient links to my actual sites and in many cases they (expired domains) have already done their job.
There have been persistent rumors on webmasterworld that google gives a death sentence to all expired domains are registered and put in use. These rumors are most likely as a result of a thread started by GG [webmasterworld.com] after 07-March-2003 update in which he stated: