Penguin update is the latest Google update affecting sites with a severe lack of natural links. They say it�s the same update (with some improvements) that Google first released by the name �Over-optimization update� and then the Webspam update.
Here is a detailed post on what it is, how it works and how to escape being hit by this update:
http://www.keywordcountry.com/blog/g...urvival-guide/