Google states in their Blog: "We don't condone the practice of googlebombing, or any other action that seeks to affect the integrity of our search results, but we're also reluctant to alter our results by hand in order to prevent such items from showing up."
Ironically, the disclaimer is in an article describing exactly how to create a link to http://www.whitehouse.gov/president/gwbbio.html with the anchor text "Failure" or "Miserable Failure." I remember a similar prank where Googling "Weapons of Mass Destruction" led to a parody of the Microsoft "Not Found" page. I always wondered how they did that.
The Google post does help to clarify one point: Their Webmaster Guidelines say, "Don't send automated queries to Google." I've never been able to find an explanation of what they consider an "automated query", but apparently links like:
"http://www.google.com/search?q=miserable+failure"
are O.K.
More to the point (Cloaking, remember?) if you dig a little deeper, Google explains that you can prevent those who post comments to your Blog(s) from creating such Googlebomb links by adding "rel=nofollow" to your anchor tags. (Online Blogs do this via their settings, so you don't have to manually edit visitor posts.)
Who knew the "nofollow" part of the robot exclusion protocol could apply to a single link? Well, googlebot and a lot of other 'bots recognize the extension, so it "sort of" works.
You could for instance add the "rel=nofollow" to affiliate links to reduce the danger of being deemed a "thin affiliate" by googlebot. Of course that might "affect the integrity of [our] search results," but so does the intelligent use of keywords, or linking to on-topic resources, or any searchengine optimization whatever.