deadsea - 7:16 pm on Mar 8, 2011 (gmt 0)
We are seeing something similar. Our main competitor owns about 20 domain names. Rather than redirect the extras to the main domain, they host them on the same ip address and all the content is available on any of the domains. For some mid tail search queries, they are showing up #1,#2,#3 in the serps on different domains.
Google used to have this problem solved. It looks like something changed in the google algorithm in the last year and this duplicate content is allowed to pop up to some degree.
I'm hoping Google gets around to fixing this, it isn't good user experience.