diberry - 3:29 pm on Jun 18, 2012 (gmt 0)
Having "newest" and "related" article links are pretty standard practices in blogging, and while they can be done badly, they really can help visitors when they're done well. Most bloggers only do maybe 5-7 links of each type, though, and it's all dynamic.
That said, in the case of this particular site, maybe Google sees this as a big improvement in site navigation, and that's why they raised his rankings.
Penguin is about bad external links, not internal links.
Actually, it's about "aggressive web spam" and no one's entirely sure what all that encompasses. A number of sites with no spammy backlinks have been hit, and it may be they had "too many" outbound links or something that looked suspicious with their internal linking. Or other factors entirely.