Just wanted to share a personal (horror!) story about one of my sites that just got G Slapped last week (why am I smiling??)
I've had the site for about 6 months now and it's an EMD which was on the first page of Google for a 2 word hot keyword. The content is 100% original and I had 20 original posts on it. I've used the same organic (don't laugh) link building process that I've used on all of my other blogs that are doing well on Google's page 1. The only difference is that I tried out a plugin called Web Ninja Auto Tagging WordPress › Web Ninja Auto Tagging System « WordPress Plugins which was recommended to my by a friend who swore by it. Going against my better judgement I installed it and ran it against all my 20 posts. The plugin created about 15-20 tags for each post automatically and at the time it looked harmless.
Fast forward 2 weeks and my site dropped out of google! And I mean site:mysite and info:mysite brought back 0 results. Not good! So I looked into my google webmaster tools and found out that there were a lot of "pages" (250 or so) that seem to be active on my site that I didn't remember adding. Upon close inspection I found that every tag basically generated a page in the form of site.com/tags/tagname and that the majority of these "pages" had the same excerpt from my posts. This means that I had a large number of "pages" in google's eyes that had the exact same content (duplicate content!). So that was the #1 culprit for my site to be kicked out of Google (as far as I can tell).
I've since deleted the tags and the plugin and requested reconsideration of my site which takes a few weeks. We'll see how it goes but the moral of this story is, don't go overboard with auto tagging on your wordpress blogs or else you might get the business end of Google's 5 finger slap!
OK that's my rant for today!