arizonadude - 2:00 pm on May 3, 2010 (gmt 0)
The site: result returning a lot less pages would certainly account for the long tail searches missing on a lot of different sites since those pages are no longer in the index.
I've got several sites that had over 10k pages indexed but now show less than a 800 in the site: command.
Sounds like Google has decided that a site should only have so many pages in the index thus giving their database much more room to add many more websites.
Smaller micro niche sites genrally don't have that many pages indexed which is why they are probably doing well.
Those waiting around for things to settle are going to be waiting for a long time.
This is the new Google like it or not.