Back in the day, Bing just couldn't properly handle 301 redirects but that issue seems to be coming to a close. We saw improvements on Bing's 301 handling both in October 2009 and November 2009. It appears Bing has gone on record this month that they have indeed made strides in their 301 handling.
301 redirects are known as permanent redirects. For example, I use a 301 redirect to redirect seoroundtable.com to seroundtable.com because many people mess up our name and link to the wrong place. 301 redirects are how this should be handled and tell the search engines that one URL has been permanently moved to a different URL.
A Bing Help thread has a webmaster claiming his 3.5 month issue with Bing and how they handled his 301 redirects is finally resolved. Bing's Program Manager, Brett Yount confirmed they did actually do something to improve this. Brett said:
While I can't provide the root cause, I can say that the team has been working on the fix for some time now and it appears to have helped other sites with similar issues as well.
Brett then gets all emotional and says:
I spend a great amount of time analyzing and then reporting trends to key teams within Bing. Sometimes it takes awhile to find a root cause out of the effects I present and sometimes it takes awhile to find the CORRECT fix--or even an interim fix to problems.
However, as I have said in the past, I will say it again now:
I don't care if your site has 5 pages or 5,000,000, I will do my best to find a solution for you. If it appears that you have fallen off my radar, ping me again. I don't mind. If your site is being affected by a chronic issue, rest assured that all of us at Bing are working to find a solution for not just you, but everyone else out there suffering from the same issue. And from all of us at Bing, thank you for your patience.
Thanks Brett and the Bing team!
Forum discussion at Bing Help.