Re: Custom 404 Error Pages
I think what they're trying to say is that an improper custom 404 error page is bad for search crawlers.
As long as the proper 404 error code is being used in the header response to the search engines, you should be ok. Having a site visitor land on your custom 404 error page is a better experience for them, so the search engines shouldn't penalize you for using one.
Google's Webmaster Tools area will clearly tell you if you're using an invalid custom 404 error page though - they won't allow you to validate/authenticate your website if you have it configured improperly - at least from my experience.
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