tedster - 12:21 pm on May 13, 2012 (gmt 0)
I can't say I've been seeing any more of this nasty practice than in the past - at least not in the top SERPs. I do, however, find a growing number of sites that are doing it. Someone is clearly publicizing some bad advice - based on trying to squeeze every last drop of PR out of the site, I suppose.
The right way is a true 404 status, perhaps with a custom error message that might look like the home page. But when you do things like that, the URL returns a 404 status and will no longer rank.
Are you seeing a true 404 status in the http headers in these cases? If so, sounds like Google has a problem. I'd expect to see a 301 to a 200 for the URL to stay in the results.