tedster - 5:15 pm on Oct 14, 2011 (gmt 0)
In a recent video, Matt Cutts said that Google does not use spelling or grammar as a direct ranking or quality signal. From what I've seen, that is the straight scoop. There is a noticeable correlation, he clarified, but it's not a direct cause-and-effect thing.
With regard to this Hacker News discussion, the site in question isn't a Panda demotion - it's a manual action penalty to keep it out of the search rankings and I've got to agree with that judgment. There's no way I want to land on one of those pages just because there's some kind of keyword match.