That's confused me too! Embedding an image from another site is hotlinking. A href doesn't have anything to do with it.

Takeshi is right. Bandwidth can cost money, so there's that as well as the copyright theft. You could also fall victim to a 'switcheroo': http://www.deuceofclubs.com/switcheroo/index.html - I've done this myself before by adding a polite message asking someone not to hotlink.

Google don't include hotlinked images in Google News so it is something they may take into account when ranking a page in their general search.

I have little experience here too but if it's an unbeatable offer then I'd think it'd help CTR, as long as it doesn't look spammy. Why not try it on a few products you're unbeatable on price for? I'd hate certain SERPs to become a list of £ and $ signs though...

"You've got no opportunity of stating your value proposition and benefits of your product before stating your price."

I agree if you're offering something unique, but if it's a product that's listed on hundreds of other sites I think it could help, and the unique factor would be your low price!

I'd say a DMOZ link is worth applying for but not worth a bead of sweat if you don't get accepted/moderated.

It's the overall variety of a link profile that counts. If you get links naturally you'll have a mix of follow and nofollow, URL-match, branded, non-branded anchor text and some keyword match thrown in, homepage links and deep links, social and non-social...

I like the phrase "If Google did not exist but the Internet did, where would you get links?"

In answer to your original question, I agree with Doug. if you're offering a product it's a good idea to offer it to influential bloggers that your target audience visits for free, in return for an unbiased review and link. But if you're just starting out don't go for the biggest bloggers as they probably get inundated. If your product is great the most influential will pick up on it through some of the 'smaller' blogs.

Last year Google said bad links to 404 pages wouldn't hurt your site. Could that still be the case in light of recent Google updates to try and combat spammy links and negative SEO?

Can links to 404 pages benefit a website and pass link juice? I'd assume at the very least that any link juice will pass through links FROM the 404 page?

Many websites have great 404 pages that get linked to: http://www.opensiteexplorer.org/links?site=http%3A%2F%2Fretardzone.com%2F404 - that was the first of four I checked from the "60 Really Cool...404 Pages" that actually returned the 404 HTTP Status! So apologies if you find the word 'retard' offensive. According to Open Site Explorer it has a decent Page Authority and number of backlinks - but it doesn't show in Google's SERPs.

I'd never do it, but if you have a particularly well-linked to 404 page, is there an argument for giving it 200 OK Status?

Finally, what are the best practices regarding 404s and address bar links?

For example, if
www.examplesite.com/3rwdfs returns a 404 error, should I make that redirect to
www.examplesite.com/404 or leave it as is?

Redirecting to www.examplesite.com/404 might not be user-friendly as people won't be able to correct the URL in the address bar. But if I have a great  404 page that people link to, I don't want links going to loads of random pages do I? Is either way considered best practice?

If I did a 301 redirect I guess it would send the wrong signal to the crawlers? Should I use a 302 redirect, or even a 304 Not Modified redirect?

Oh yes, thanks for that. I've read that page a few times. :S

Apologies for the confusion Alex.

Don't have a crisis of confidence anyway! If there's a canonical 99 times out of 100 (probably more) I'm sure Google would get this right whether it's the homepage or not.

What server is the site hosted on Alex? Or are the URLs controlled by a CMS?

The two versions you speak of are treated as duplicate content. Ideally you should make sure the URL is the same everywhere, and 301 redirect to your preferred version. Are you sure the browser itself isn't removing the trailing slash? I know Chrome does on non-directory pages.

Saying that, if you have a canonical tag it shouldn't cause a massive problem, but it will help to do everything properly. Do everything you can to make sure all links under your control are the same version.

"the US rankings are still very strong, so for any Penguin penalisation wouldnt it be applied equally across all indexes?"

I'm not sure - I think the updates are usually language based as Google phrases it along the lines of "1% of English language queries will be affected" - but tapshop321 is UK-based so who knows...

"With the explosion of the band, again if this was a a major factor, wouldnt we have dropped equally on Google.com ?"

It's just a hunch but I'd say no, perhaps based on the above, quality of links from either country and potentially hundreds of other factors.

If I was you I'd write occasional guest articles, with a link back to onedirection.net, for other related UK websites - fansites or official sites of similar bands perhaps. I wouldn't bother too much with getting exact match anchor text - if you use your URL you have the match anyway and you don't want your link profile to be too heavily waited towards one phrase, just in case (even though you should naturally get 'one direction' matches). Mix it up a bit if you go ahead, with URL links and phrases like 'one direction fansite'. Even just a mention of One Direction in these articles could help.

Have you interviewed One Direction or similar UK bands? If you could, they're likely to link to the interview on your site.

If you haven't already, perhaps setting up Google+ Authorship would help too.

That could be an issue. Was it targeted to the UK before?

Looking further into it, the Penguin updates throughout the year (the first in April)  don't match directly with the timing of drops you mentioned, but some of your "one direction" exact match anchor text links could have been devalued. The site-wide footer link here for example, on a completely unrelated website (that's a big no-no in Google's eyes): http://www.tapshop321.com/blog/

How about the explosion in popularity of the band? Your Domain and Page Authority is lower than most of the results on the first 3 pages. This is worldwide but illustrates the point - there will be a lot more competition from other sites now: http://www.google.com/trends/explore#q=one%20direction&cmpt=q

Is the site registered with Google Webmaster Tools? If so, is it geo-targeted to a particular country? Do you have links from other UK sites? Do you have a physical UK address you could list as a contact on the site?

Be aware you might lose some US traffic if you do decide to change/set a location, though you can still target a particular country and rank well in others.