The number of sites on a single ip is directly and inversely proportional to the quality of those sites.
The majority of Google's database is informational sites which are generally free and therefore can't afford (or it is not in their interest to purchase) dedicated hosting. For cross-linking/anchor text value/pagerank purposes I can see why links from one website on a shared IP to another with the same IP could be devalued, but never penalised.
I don't think anybody is suggesting for a second that a site on an IP with multible sites is definitely going to be of low quality.
I'm afraid that's exactly what Brett said.
p.s. Bang goes my senior status chances :)
There are far, far more important and valuable things to aspire to than that Mhes. But it does seem to be the case that you have to agree with Brett on everything (and defend him as shown above) to be a moderator/senior member. By the way, I'm basing my opinion above on my experience as I have servers with web sites that share IP addresses and web sites that have their own IP address. At this point I cannot see the benefit for a small site (commercial or non-commercial) to move to a dedicated server with its own IP address as generally they will not be fighting for top positions on crowded, highly commercial keywords such as 'credit card' or 'travel'. Then again, my experience tells me that a site hosted on a shared IP could still get No.1 for either of these keywords.