Despite my pleas, all the way to the President's office, GoDaddy refuses to fix soft 404s when Custom Error page is used.
If you are aren't aware, Google has been insistent that web hosts serve up a true 404 server response code when a page not found error is generated from an invalid url. GoDaddy's shared Windows hosting server (IIS 7.0) has been responding with a 200 HTTP code (instead of the correct 404 HTTP code) if you choose to use the Custom Error page handling. This is known as a "soft 404" and is strongly advised against in Google's webmaster quality guidelines.
FYI, there are three options for error page handling in their shared Windows hosting environment: 1) use the default GoDaddy error page (something that looks horrible and leaves the user unable to navigate to your website), 2) use a Custom page (which would be desirable, since you could make it look like your site and provide useful links for the user), or 3) use your homepage as the error page.
In options 2 or 3, GoDaddy's server will respond with a 200 HTTP error code - meaning that the page exists and was served properly. This is WRONG - as it tells the search engines that the invalid url exists and it is, depending on your choice, your Custom error page or your homepage - which would then be indexed and considered duplicate content...a problem in Google's eyes.
I have begged them to change this. They have admitted that their server does respond with a 200 HTTP code. At first, they thought it was appropriate because they were serving up the Custom error page or the homepage without a problem. But I, at great lengths, explained that this is not the proper use of a 200 HTTP code - because the page being requested does not exist.
After finally understanding this, the office of the president (yes, I reached up the top of the organization) responded that they were aware of the issue, but weren't going to do anything about it - unless, maybe, enough people let them know it was a problem.