I'd be interested in a further explanation of "Google absolutely takes action on sites that violate our quality guidelines [...]".

Does that mean that Google manually decrease rankings of spammy sites that their algorithms haven't caught? Does this entail decreasing the rank of the entire domain, the IP? Does blacklisting ever happen?

I ask since Google have previously[1] said they don't wish to manually interfere with search results.

[1] "The second reason we have a principle against manually adjusting our results is that often a broken query is just a symptom of a potential improvement to be made to our ranking algorithm" - http://googleblog.blogspot.com/2008/07/introduction-to-googl...