tedster - 6:43 am on Apr 22, 2011 (gmt 0)
do the pages that are linked directly from a bad page (or a group of bad pages) suffer more than pages that are more distantly linked from the bad page(s)?
I'm still studying this area, but the strongest correlation I see so far involves collateral demotion for pages that link TO the "bad" page, not pages that are linked FROM it. If Google's purpose is to keep their users from visiting pages that make for a poor experience, that direction (linking TO the bad page) would also make more sense than flowing the demotion outward FROM the bad page.
The challenge is this: there is no easy way to know if a mildly demoted page is catching the site-wide collateral damage score, or if that page also "earned" that smaller demotion in its own right.