With the huge number of postings on all the various forums, concerning this update, most people don't know where to start looking for information about the recent Google update. The following is an attempt to put down rationally (I hope) most of the information that is known and the (unproven) theories behind the update algo.
Starting on the 16th of November, a major shift in results was seen on Google. Veterans recognised that Google appeared to be doing a major update, not seen for many months, as reported first on WebMasterWorld who named it "Florida", continuing the tradition of naming updates rather like hurricanes. In this case it was a hurricane! As was usual with many updates, there were moans and groans as people complained about their sites falling. Many people were unaffected (including us) but the symptoms of the sites being dropped were not usual. No penalties, such as PR0, seem to have been applied against pages that had fallen - yet none of the pages targeted at specific key phrases, particularly index/home pages, appeared in the top results for these search terms. Indeed some had dropped hundreds of places and, in some cases reported, off the scale. Yet these pages did appear for obscure phrases and were obviously still in the index.
It appeared to us and to several other respected names (though hotly disputed by others) that some sort of over-SEOd filter had been applied to check if overt SEO had been done for that particular phrase. It was as if Google were checking to see if external links to the site included the phrase, on-page optimisation was being done for the phrase and even if the domain included the phrase. If the density of the optimisation, both on and off the page, appeared too artificial, then a filter was tripped and down went the page - solely for that phrase.
Google had never looked favourably on abuse of their systems and many established SEOs looked upon this algo tweak as a way of Google getting rid of the abuses of links and stopping the scrambling for getting (and sometimes buying) links including your required anchor text from other high PR, but probably irrelevant to your subject, sites. It seemed to make sense.
On Friday, 21st November, Google decided to tighten the "filter". All hell broke loose as tens of thousands of sites disappeared from positions they had held (in some cases) for years. We noticed some of our client sites plummeting for their major key phrase from being #1 to total invisibility. Yet this was only in highly competitive areas, not for their secondary phrases. These sites were, in most cases, not highly optimised, had not sought reciprocal links but had achieved their rankings through being on the web for 4 or 5 years. The bad news was that their company name and domain included the key phrase, sites (including directories) linking to those sites included the key phrase in their links and Google interpreted this as over-optimisation and down they plunged. In many areas all the top 20 ranking sites disappeared, including industry leaders, to be replaced by educational sites, news review sites, government sites, major shopping portals or directories. Something major had happened - but what?