If you get caught doing black hat SEO like hidden fonts and backdoor pages, does Google just ban your web site, your IP (so NONE of you sites work) or what?
Imagine this hypothetical situation: You find your competitor's server hosts a bunch of other sites on the same IP. One of them happens to be a hosting company. You buy some hosting from them and set up the most evil blackhat site ever. The IP gets banned from Google and that's the end of your competitor. So logically speaking, Google wouldn't ban an IP. Besides, IPs can be changed quickly, a domain ban would be far more permanent. Hope this helps
not to mention that with shared hosting, VPS, or even a dedicated server in some instances, usually multiple sites-- often multiple sites that are not owned by the same person-- use the same IP.
But on the basis of 'trust rank' the other sites on your server do matter. And this is why Google's "trust rank" will never gain momentum or respect. I'm with them, IP may have a tiny effect, but nothing significant. Now, if my husband catches me with a black hat seo, that would be another matter
Basically spamming the search engines. Anything that may breach Google's Webmaster Guidelines and Yahoo's Site Guidelines