Jane_Doe - 6:26 pm on Feb 28, 2011 (gmt 0)
Sites that took a hit were not PEANALIZED, and that's important to appreciate: not a penalty! There is no message in their Webmaster Tools about any problem.
Penalties can just be "the minus x number of positions", not necessarily anything reported in Webmaster Tools. I have had a number of individual pages penalized with this update on a couple of older sites, written when the algo was less spam sensitive. Most of the pages I had already updated to today's standards were okay. The spammy pages with really great links (especially something like a NY Times link) are still ranking okay, too.
The rest all have to be rewritten and the link quality improved. I suspect that the back links from the sites that took hits themselves with this update are going to have a cascading effect on other sites.