There’s a short post on the subject of spelling, grammar, and the impact of both on Google results over at Graywolf’s SEO Blog.

Penalizing based on misspellings is a tricky issue. I would never imagine that Google would become the spelling police and a simple typo would doom you to page two and beyond. However it might not be a bad idea to consider excessively bad spelling as signal of poor quality. However what about technical and scientific material, they use $5 words that only PDF search patent lovers can appreciate.

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link – via Graywolf’s SEO Blog