There is a lot of controversy about whether Black Hat SEO is really "bad" in the ethical sense.
Google makes it clear that it disapproves of certain SEO tactics, such as hiding keywords with invisible text, or showing one page to Google's spider and another to actual human visitors. (See what Google recommends and what they don't.) Methods that conform to what the search engines like are called White Hat SEO, and disapproved methods are called Black Hat SEO.
White Hatters say that Black Hatters are unfairly trying to manipulate the SERPs. Black Hatters counter, "What constitutes 'fair'? Isn't any change you make to your page for SEO purposes an attempt to influence rankings? Why is one method less pure than another when we're all just trying to get our pages to rank higher? Further, if an engine is ranking a bunch of irrelevant sites above mine, what's so wrong about using any method at my disposal to get my relevant site ranked above them? Doing so doesn't benefit just me, it benefits the searchers because it gives them what they're searching for. And it also benefits the engine, because searchers will think better of the engine for giving them more relevant results than it would have otherwise."
Adding to the controversy about Black Hat SEO is the fact Google does allow a certain select few sites to operate contrary to its own stated policies. Danny Sullivan complains that Google's cloaking policy is inconsistent (more on cloaking below), and that the policy wording should be updated. He further notes that the reason Google allows some cloaking is that it improves searching rather than hinders it, and that it's therefore inappropriate to think of cloaking as synonymous with "bad".
Whether you think Black Hat SEO is bad or not you should avoid it anway, because it can get you banned from the search engines, or at least reduce your ranking. Google has been known to remove sites it felt weren't playing fair. Granted, this isn't likely, but why take that risk? Also, much Black Hat SEO involves some fairly technical work. If this article is your introduction to SEO, you likely don't have the skills to be a successful Black Hatter anyway -- at least one who doesn't get caught.
If you want to stay on Google's good side, here are some things to avoid:
Invisible text. Don't put white text on a white background. In fact, don't put even very light yellow on a white background. The engines aren't stupid; just because the colors aren't exactly the same doesn't mean they can't figure out there's no contrast. Yes, there are clever ways to try to fool Google about what the background color actually is, but Google is probably aware of most of them anyway, and I won't cover them besides.
Cloaking. Google knows what's on your site because periodically its automated robot called Googlebot visits all the pages in its index, and grabs all the page content so it can analyze it later. Cloaking means showing one page to Googlebot and a completely different page to real human visitors. Google despises this aplenty.
Keyword Stuffing. The engines want your pages to be natural. Finding every place to cram your keywords onto your pages -- or worse, including a "paragraph" of nothing but keywords, especially if they're repeated ad nauseum -- is a big no-no. Do you consider pages with lists of keywords to be high quality? Neither does Google.
Doorway pages. A doorway page is a page built specifically for the purpose of ranking well in the search engines and without any real content of its own, and which then links to the "real" destination page, or automatically redirects there. Doorway pages are a popular choice of some SEO firms, although Google has cracked down on this and many webmasters saw their pages disappear from the index. Some SEO firms call their doorway pages something else, in an effort to fool potential customers who know enough to know that they should avoid doorway pages. But a doorway page is still a doorway page even if you call it something else. Some engines may decide that an orphaned page is a doorway page, and if so then the page or the site might suffer a penalty.
Spam. Spam has a special meaning with regards to SEO: worthless pages with no content, created specifically for the purpose of ranking well in the engines. You think they have what you're looking for, but when you get there it's just a bunch of ads or listings of other sites. The webmaster is either getting paid by the advertisers, or the page is a doorway page, with the webmaster hoping that you'll click over to the page s/he really wants you to go to.
Penalties:
It's important to distinguish between the two punishments from search engines since they're entirely different. Being banned means your site is removed from the index completely. This is pretty rare; most people who think they've been banned are actually still in the index. It's easy to tell whether you've been banned by Google. Assuming your site was in the index to begin with, search Google for site:yourdomain.com. If you get any results, your site hasn't been banned.Being penalized means having your rank reduced. Unfortunately I know of no way to test for this. I do think that most of the time a webmaster thinks they've been penalized they're wrong. Rankings change, sites drop -- it's all part of the way the search engines work. But often many people take it personally and feel they're being victimized.
