crown - 10:22 am on Jan 27, 2006 (gmt 0)
I agree, Google seems to do nothing with regards to banning spam-like websites. My SERPs incude a website that is saturated with hidden keyword stuffing. I've reported this site but, alas, it is still #1 for a very high traffic keyword.
I think that GG do actually use the spam reports for "something", but these reports probably just go to the algorithm writers to help them imporve the search technology.