Excellent analysis, thank you, especially in the distinction between "suggested sites" and the Bing toolbar's behavior. I can't argue with your methods. However, I do differ with some of your conclusions:
> The behaviour I’ve seen explains Google’s experiments, but does not support the accusation that Bing set out to copy Google.
I don't think it's so much about "set out to copy Google" necessarily, as it is that they are explicitly parsing Google queries and results from the clickthrough data and using it (quite directly) for their own results. What they set out to do is immaterial given what is provably happening.
> Bing Toolbar is tracking user clicks and Bing could use the result to improve search results. I don’t personally see any great distinction between this behaviour and Google’s many tracking, indexing and scraping endeavours which they use to improve their own search results.
The difference is that Google has proven that the results of certain queries are being directly fed as Bing results. If Microsoft does the same with Google rankings, I'd see your point, but right now the evidence only points in one direction.
> While I personally dislike the privacy implications, Bing Toolbar is pretty upfront about it when it gets installed (unlike much web page user tracking.) The fact that the tracking is plain HTTP not HTTPS, with the content in plaintext, would seem to indicate that they weren’t seeking to hide anything.
I'd be interested to see if Google over HTTPS queries are being transmitted by the toolbar over HTTP. That would be a pretty serious privacy violation IMO, especially when you pair that with unencrypted wifi at Starbucks. See the AOL search log fiasco: http://www.somethingawful.com/d/weekend-web/aol-search-log.p...