tedster - 2:35 am on Oct 4, 2010 (gmt 0)

I don't think it's a penalty, I think it's more of a left turn. Too many pages that Google considered lower quality for the query were ranking too well, so they've evolved the algorithm even further away from text match factors.

The new algo seems more to be about topic extraction - for the page and the site - as well as more overall site quality factors. Some form of semantic evaluation and topic extraction is stronger than it ever was. And there's possibly a heavier dose of human evaluation, although a different analysis of backlink profiles might be carrying a lot of that burden.

The left turn is not perfected, and for some SERPs the quality droop is visible. IMO, it won't stay that way.