Kirsten Osolind, on her fantastic re:invention blog weighs in with some smart steps companies can take to extinguish negative online publicity:

1. ACKNOWLEDGE RESPONSIBILITY RESPONSIBILY
Ifyour company has done wrong or had an issue, acknowledge theissue/wrong, take responsibility, and provide an overview of what youare doing to address it. Respond on the site where the negativepublicity occurred if possible and if warranted, on your companywebsite.

2. GO TO THE MATTRESSES - BUT DON'T GO ALONE
If theonline criticism is unfounded/false/incorrect, utilize your networkFIRST. Solicit help from loyal customers and advisory boards - askingthem to post personal positive feedback, articulate your key messages,or provide enthusiastic endorsements to counter the negative claim. Askthem to question the person who made the unfounded online claims andsolicit more specific detail from the negative evangelist. You'll bebetter prepared to answer on behalf of your company.

3. TRY PAID SEARCH
Paidsearch (paid inclusion, pay-per-click) can work to counter negativepublicity. You can articulate your key messages to your targetaudience, showcase customer endorsements, and push down the negativecomments.

4. DO GOOD AND BE GOOD
Continue to offer goodcustomer service and good quality products. Over time, loyal andsatisfied customers will help douse the online flames and evangelizetruth over fiction.

5. LITIGATE AS A LAST RESORT
As a lastresort (and we mean a LAST RESORT), companies can pursue litigation,contacting site owners directly or spam checking/reverse link look-ups.

I almost left that last one out. ;-)