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Rishi Lakhani wrote this earlier today on the subject, great blog post- http://explicitly.me/manipulating-google-suggest-results-%E2%80%93-an-alternative-theory
I would imagine the best way to proceed is to find all the spammy links and contact the owners of those blogs to remove those links. I can't imagine penalties being applied to your site as I would think Google would just stop those links having any effect at all, though I am no expert on this.
Rishi Lakhani wrote this earlier today on the subject, great blog post- http://explicitly.me/manipulating-google-suggest-results-%E2%80%93-an-alternative-theory
12/14/2010 There has been some talk of the power of exact match domains recently and more so since Matt Cutts mentioned that Google would be looking into the strength of exact-match domains within the SERP’s. There are differing opinions on whet...