I know they ban based on domain name. I've read mention of some people getting IP banned but not very often.
If the domain gets banned from Google it's not the end for that domain however. If you have any skills drawing traffic from Yahoo or MSN then you can still use it there.
Ok, great, thanks for all the super answers. I lease a VPS host and run many domains on it, as well as some for other folks. I'd hate to mess around and get their sites shut out.
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