It is certainly not crap, and a very good thing they seem to be trying to accomplish.
First, I’m still no tech guy, but some servers are set up so that site.com and http://www.site.com *must* serve up the same content. In this case, I’ve never heard of a problem in terms of duplictae content (in terms of splitting the PR, yes that likely will still occur, and should since PR is strictly based on URL linking and knows nothing about content, or even if a page exists or not.) Other servers are set up so content on site.com and http://www.site.com *could* be different. In this case, it’s like any page. If you make duplicates on site.com/page1.htm and site.com/page2.htm, I certainly hope Google detects that and doesn’t rank both pages. Likewise there is no reason to seperately rank duplicate content on subdomain1.site.com and subdomain2.site.com including the www subdomain.
“I really fail to see how you consider that to be duplicate content, those look like affiliate links to me.”
They are being indexed as different URLs. How is Google supposed to know that site.com/index.php?123 is supposed to be a unique page but site2.com/index.php?123 is supposed to be an affiliate tag? Obviously it can’t. Affiliate links don’t cause problems. Having the exact same content on different URLs does, and it is easy to avoid the problem.
Google got a lot better at indexing query string URLs last year, and as a result a ton of complete garbage both got into the index, and also led to millions of duplicate pages offering anchor text links. The search engines have to figure out a way to filter out all these “noise” pages since nobody wants duplicate pages ranking. Clearly this is a work in progress on Google’s part and I definitely don’t think they have a good solution at this point, but you can make things a lot easier by making your linking consistent and not deliberately creating dupicates.
There are quite few threads on this on different webmaster boards. Webmasterworld has one called “Page rank to 0 only on 1 page” with one person stating that while this happened to his site, he still shows PR in the Google Directory so the toolbar PR display showing white is just some glitch in the process.