I think the best course of action at this time is to let the results settle a few days (a week?) and while you wait take notes of what websites are at the top and why you think they are there and then from that come up with ideas to improve your own website to be better.
For your final thought I would say business is business and the only thing you can do is don't get emotional however hard and keep trying to do your best.
I like the idea that someone else has said for the next few days they will let the junk float to the top to clear them out if thats what they are doing then they will be able to see a range of data which will help them come up with the tweaks that will improve the results in the long run as in the end if the searchers aren't happy then Google will loose out as more people will have to search more often on Bing, Yahoo & co.
For me I did get a scare on Friday I seem to be down a little however I have hopes that I will continue to do well and to let everyone else know there are a few good bits of information in these threads. :)