I don't know if there's a 950 penalty or a rectal rabbit penalty, but there's definitely something going on. Google applied for a patent in December of '06 for a "phrase based information retrieval system". While this new system appears to have some storage savings and document retrieval speed benefits, the main focus appears to be on identifying spam documents, keyword stuffing and the like.
Here's the patent application:
http://appft1.uspto.gov/netacgi/nph-...DN/20060294155
Here it is in plain english:
http://www.seobythesea.com/?p=413