Reno - 9:26 pm on Oct 14, 2011 (gmt 0)
Bad neighborhoods are groups of sites (often pyramids or rings) that are used to artificially inflate backlink scores. The end goal may be webspam or something more malicious like malware distribution.
The sites in these bad neighborhoods often use the same template or theme. The bigger ones may use several different ones. The content is pretty useless and it exists only as a vehicle to put the links online, so you frequently see scraping and spinning to create the text that fills up the pages. The text from public domain sources is another tactic.
That definition is so concise and clear it would be perfect for Google to co-opt and utilize as a popup box at the Guidelines page. If they would do that sort of thing ~ not just for "bad neighborhoods" but for other subjective terms as well, such as "quality" ~ then people like me would stop criticizing them for their current lack of clarity. I'm not saying that they don't say a LOT, they do (almost too much), they simply seem incapable of saying it as well as you did in your posting.
With clarity comes understanding and with understanding comes improvement ~ for the life of me I cannot grasp why Google misses this fundamental point.