It's pretty obvious to me too, Mel. The update is going on for all sites, and it would have been way to quickly for someone to actually intervene on this site, not that they would anyway.
The spam was removed and it takes a few months to then get any penalties automatically removed. Just what googleguy always says.
I am not suggesting that the site (which still has a PR0 on the toolbar) has a PR in the directory due to a post from someone here, ( in fact the site had an intermittent PR in the directory a couple of days before the update started) but the threads I read from Googleguy say that the procedure is to clean up the site and then email asking for reinclusion. This was done about a month and a half ago.
I believe that the penalties may be more or less automatic (though there is plenty of evidence to suggest that at least 18 months ago they were imposed as the result of a blitz against certain types of spam) but that you will not be reincluded if you clean up your site and just wait. This would require an algo that not only detected hidden text and penalized for it but would continually monitor the site and when the infraction was cleaned up restore the sites PR and ranking.
I am sure you are aware of the blitz 18 months or so ago against hidden text and hidden links, and that the sites were not automatically restored as and when they cleaned up the site, but on a one time basis for those who cleaned up the site and emailed asking for reinclusion. I am also sure that you can see that the same level of penalizing sites for hidden text in the past 18 months has not been at the same level as during the blitz (there is plenty of it in the SERPs now).
These two facts seem to me to argue against the automatic lifting of penalties.
Edited by Mel, 16 November 2003 - 10:39 PM.