Content_ed - 8:05 pm on Dec 14, 2011 (gmt 0)
I never heard that Google cared about hard versus soft 404's. I thought I was doing everybody (visitors, myself, Google) a favor by doing the IIS redirect to a custom 404 page provided by Google with a search option.
WebMaster Tools reports on Soft 404's with:
"Redirecting to error page"
which I would have thought meant it was cool with them, especially when it's their code on the error page.