Ok, this is both slimy and ingenious.
Steve found out that some of his stuff was showing up on a site in Japan. All the images were broken, all the meta tags were stripped and there was some funky japanese link appearing at the very top of the page. Not being fluent in Japanese, he had no idea why. So he asked me to find out.
i don't read Japanese either, but i figured someone at the company would. (Actually i knew one definitely did, but i didn't want to bother him. He replied to a general post anyway ;) )
Turns out the link was for a Japanese porn site.
What they were doing was constructing a URL that Google (or any other search engine) could crawl thinking it was a real page. Google would collect all of the keywords, and then take the link at the very top as being HIGHLY relevant data and give it a really high rank. The images were broken because no human would ever see the page.
e.g. http://pack.soksok.jp/y/.u### (where the # are a three digit number, e.g. 001 apparently gets you Yahoo! UK's search page.) As an added bonus, it would also proxy any local link, since that obviously would increase it's reach.
For those curious, the .htaccess rule to use would be:
<Files ~ "(php|html)">
Order deny,allow
Deny from soksok.jp
</Files>
add the above file to whatever directories you wish to block.
Oh, I did. I also mentioned it to a few other folks. But since stuff like this has a tendency to take on a life of it's own, I figured the more folks I let know, the better.
Actually, there's a PHP hack you can do as well. I'll forward the file to you tonight (my time)

Google doesn't like this sort of search result tampering, so why not tell them about it, too?