How did it happen? Search engines operate on the premise that relevancy of a particular site is related to how many external links there are to it. An underground blogger movement picked up on this and created a 'link bomb', encouraging people to link to the page and label it 'miserable failure'. The search engines were not at first at liberty to censor any such attempts, so off it went on its merry way. A similar stunt was pulled recently using the term 'liar' and Tony Blair's homepage.
One drawback is the fact the link bombs end up being 'self defeating'; the more successful they become, the more people talk about it on the web and other sites end up become more 'relevant' in search engine terms than the orginial bomb.
Google has since modfied its functions to spot link bombs but other search engines have not yet done so, so you can still get George Bush under the search term 'miserable failure'.
In corporate terms, the report discusses the example of BMW Germany which was blacklisted by Google in February 2006. The site consisted of keywords which could not be seen by customers but could be seen by search engines, purely to bump it up the list. Google has rules to guard against such tactics and dropped it from their search results. The site has since been redesigned. The report refers to this as an 'uneasy truce' between the search engines and the optimisers who are trying to cheat the system to their advantage.