bwnbwn,the penalty shouldn't transfer. If it did, then why wouldn't your competition register a domain, spam the hell out of it, and then 301 it to your site?
jgold454, we have tried to get a hold of businesses that have recovered their rankings to see if there is a time limit or any tips they could pass on... but have had trouble getting people on the phone. We saw one domain recently that recovered their rankings after a year of a -50 penalty. So far it looks like there is not a time limit... but, this is using the assumption that this is indeed a penalty and not an algorithm change. If it is an algorithm change then I would imagine it could continue indefinitely until they are done with the update. ::shrug::