Whilst I do some linking it has been in directories and in forums which I use, my site has gone back to where it was 2 months ago (top of page 2). My site has a custom news feed, i.e. news written by journalists for my site only, plus I have links (without nofollow) from newspapers like the Times, etc. so you would think it would rank very well? But guess what the #1 and #6 positions are held by two sites that are exact duplicates (no dup content penalties for these guy) and the amount of keywords that they rank for is amazing. I am not sure what sort of tricks they are doing but if anyone wants to look I will post the search terms. These site have ranked like this for well over a year (google dance or not), so whatever they are doing they are good at it.
I think you are right, the home pages are exactly the same but the content is spread over the two sites, but this still makes the site a duplicate?