In a WebmasterWorld thread, the effects of 301 redirects are discussed. Can you be penalized?
Apparently, the answer is yes. Tedster notes that a number of webmasters, when they discovered the potential of 301 redirects, "started throwing [them] around like confetti." The penalties were harsh and now he advises against using it.
How bad are the penalties? Tedster says that they can be so bad that your domain could lose trust in Google's eyes -- forever. He does acknowledge that reinclusion requests can be filed in the event of mistakes.
What about using 404s instead? Tedster advises against that:
It would be a sign of good faith, I'd say, to abandon attempts to hold on to any link juice the previous domain tried to transfer and let the new domain stand on its own.
Forum discussion continues at WebmasterWorld.
