Google bowling,
seo sabotage, negative
seo. All the same thing.
Find out if a site buys links and then report them.
File a complaint with G/Y!/MSN saying a site is stealing copyrighted material. Name the page and the engine has to remove the page for 10 days.
Send a ton of spam links with questionable anchor (buy viagra, etc) to your competitors site.
Black social bookmarking.
Hijack the content of your competitors site and publish it as your own on a shady site (which you would presumably buy/already own).
Create a blog about how shady/shitty the site is, promote the hell out of it, outrank them for their main keyword phrase.
301 a bad site (porn, gambling etc) to your competitors site.
Pose as a disgruntled employee and talk shit.
There's a lot you can do to disparage a competitor online, the worst being DOS attacks. I wouldn't go that far unless I was really, really desperate.