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I have an exact dup of one site on another site (different domain name and host)
google does not like that
to prevent penalization do I have to just:
1. not have any hotlinks on one site to the other
2. prevent indexing of the mirror site altogether using 'disallow: /'
if I want to index both sites, just change the content of one site?
If that is the case, just how much content do I have to change to make it a different site? and do I have to change 'all my pages'?
As a quick tip, could I suggest that your question would have been better suited to a more general forum such as Webmaster General [webmasterworld.com] ... the issue of robots.txt was just one item you needed answers for, so you would have more chance of a fuller answer in the General forum.
My own take on Google and duplicate content is that it is less a 'penalty' (which implies that it could be 'lifted') and more that Google simply won't rank one of the two duplicate pages/sites. Trouble is, you just don't know which one will be ranked and which one tanked ... and depending on your marketing, you could end up with your primary site missing in Google for key terms.
That said, the short answer to your first question is #2 (disallow spiders on the second site, using robots.txt).
If you want to have both sites indexed and (hopefully) ranked, then yes, you will need to change content. I don't think anyone can give you an exact figure for the amount you need to change ... that's really in the lap of the Google algo, and what works OK today may not work so well tomorrow.