Penalized for not using 301 redirect?

Is 301 redirect the only option?

[Talar]

My website homepage has been penalized since August. Although the PR 6 remains, the cache has been removed (it is called “partial indexing”) so it is not listed under any keyword search (other than [example.com]. Google’s customer service keeps replying “review the Webmaster Guidelines”. Also, most of the thousands of links to my website are no longer listed, however I know that they do exist. A search for my website’s homepage title reveals over 30,000 results and almost all of the ones I've been able to review are links (these are the links that used to appear when searching for [link:example.com]).

My website is accessible as example.com and www.example.com. Somebody suggested that Google may have penalized it for not using a 301 redirect. I suggested this to the hosting company and they replied:

--start--
The domain is currently set up like this:

www.example.com. 44M IN CNAME example.com.
example.com. 44M IN A 555.55.55.55

The CNAME of www.example.com goes directly example.com. I wouldn't think this is a problem with google's bots. If the bot would come into either www.example.com or example.com it will still get to your files and index them.
--end--

Does this make sense? Is using a 301 redirect a better alternative?

[Vadim]

www.example.com and example.com and www.example.com/ in principle may point to different pages.

To make Google know that it is the same page you (or your host) have to use 301 redirect.

You will not be banned if you do not do it, rather your SERP and PR will be diluted. However the effect may be the same as you are banned.

Seems most here redirect all forms to
www.example.com/
though the only importat thing is to have just one canonical form and to redirect all to it.

You may check whether your host redirects for you if you get free wget utility and issue the command
wget -S --spider http://example.com
or similar.
You should see 301 redirects on all except the canoical page.

Vadim.