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According to Google's help files: http://support.google.com/webmasters/bin/answer.py?hl=en&answer=34648 your solution should be just fine. Scott O.

If the homepage is live then the site is aging, if the page is completely deindexed then it is a dropped domain. I would suggest have a splash page homepage only that remains indexed.

Maybe you can use cookies to set the language, instead of hard coding it in the URL? Subfolders are the optimal structure from an SEO perspective. With any other structure you will not benefit from the domain authority of having a single site, and will have to duplicate much of your SEO efforts.

just nofollow it and then you can link to any site you want without worrying about anything. Link anywhere you want and it won't harm your site if it's nofollowed.

Well, text on a page is going to be readable by Google unless you hide it in some way. You can check by having a look at the Lynx text viewer: http://www.yellowpipe.com/yis/tools/lynx/lynx_viewer.php

It doesn't really matter, you are sending a little more PR to your hompage if you link both places. I would make sure you fill out your alt tag in the image.

I've never come across any stats, but logic (well, my logic at least) and from everything I hear from anyone is that if anything, it's increasing. People are getting better and better at searching for specific things online. But... it's ultimately up to Google. Google may decide that your search query, "where to get a hawaiin pizza 24 hours a day in New York" is very specific but it's going to focus on shorter phrases like "24 hour pizza" in the search results.

Obviously, can't be completely certain why the drop would have occurred, other than explaining the many ranking factors that you probably already know about. What I would point out, however, is that each region acts like a different algorithm.  They're all very much based on the same one, but I think there's definitely a case that some ranking factors are more important in other regions. Give you some examples from what I've seen: On-page optimisation in Google France can make a big difference.  I've seen a number of clients and sites (only correlation, not proof) that have tweaked their on-page and had really significant gains.  Another example is Google NL. All that Penguin stuff that happened last year? Well, for many niches it looks like someone forgot to tell the Dutch because you can see an almighty amount of spam ranking very, very well. I realise this doesn't help you very much, but the reason I mention it is that, if you have the time and resource, it really does pay to look at the ranking factors and their "weight" for yourself - do your own testing based on best practices, if possible, and you might be able to see some differences between Google UK and AU.

From my understanding, if you no links going to that url, it might be the crawler verifying existence of the 404 page. So displaying a 404 page is best option for that. However, if you have links going to that url, you should either fix those(if internal) or do 301 redirect as you said.

Google has not Stopped there robot.text checker you can find it in webmaster tools under blocked url's.

What you are doing seems proper - and it sounds like you're only doing one hop, you just don't want to daisy chain 301's or you'll lose some page rank being passed.

It has to be noindex because our development team does not have the capacity to make these websites unique structure/template from our main site. For example - the main site is www.red.com and the new site will be www.blue.com and the only way to launch www.blue.com is to have it basically be the same site as www.red.com (and it needs to be launched now for legal reasons). We are also launching localized versions of our website such as www.red.co.uk and are planning on using the canonical tag for these sites.  However, I thought that for the sites with a different URL we could risk having Google see us as a Network since the content will be so similar and traffic flowing in both directions - and this is something important to avoid so in order to use the completely new sites they need to be separate in terms of content, ip, hosting, etc... (and have traffic only flow in one direction). Do you disagree?

Definitely too many times since the end of last month. Server problems do happen and I've never come across a 100% perfect host, but a site going down 4 times in just a few weeks is no good, especially if it's for more than just a few seconds. I would talk to your host and see if they have an explanation...and if not, I'd search for a new one.

Yes, def planning on changing it to benefit us but also want to make sure it isn't harming us (in terms of priorities for us fixing).... This doesn't seem like something Google will penalize us for?

I agree with EGOL, with the caveat that if you are using Wordpress, you should have a plugin that prevents the excessive multiple pinging of posts and pages after editing. If you edit a story and it pings other sites, then you edit another part and it pings again, and you keep editing and saving, you will cause problems for yourself. So I use MaxBlogPress Ping Optimizer

What CMS platform are you using? Also do you have your mod rewrites in place on your .htaccess file?

Yes and no. Yes you can add websites that you don't own to your SEOmoz campaigns. No, you can't see those keywords because they are taken from Google Analytics, and if you don't own the website you probably won't be able to link the Analytics account with your SEOMoz campaign. But if you want you can try this free tool to see some of the keywords a website is rankings for: rankpanel.com - it shows keywords even for websites that you don't own.

Awesome sauce!