As a result, our standard (free) listing went from the bottom of page 3 on google for a search on <product> to number 7 on page 1 within days.
Now I'm not complaining, but how does adwords boost your PR for a given keyword in google standard search results?
It might seem that the ad was the cause, but it is coincidence only.
<added>Oh, and welcome to webmasterworld! Junior Members can say that, can't they?</added>
Scenario: you put up an ad. People find you who wouldn't have otherwise, thanks to your new add. Some percentage of these people add links on their sites to your site. Google scans their sites, finds these links, and raises your site. The ad lifted your ranking, but not directly, and not because Google was doing anything dishonest or unethical, but just as the natural course of events.
I'm not saying this is what happened to you, just that it's well within the realm of possibility.
I wasn't suggesting the Google folks were giving me preference cos I'm paying money. (ha! I just noticed the Google sponsorship banner on the page here - they're watching me - just smile and nod your head).
One thing I had considered though was the possibility that in assessing our site for relevancy based on the keywords we nominated for the ad, that the relevancy may have also been applied to our other listings. Again I'm not suggesting any wrong doing! I'm just wondering if there's a crossover.
Am I making sense?