Handle redirects correctly

Our company (Ideal Interface) has been working on a number of client engagements this year and we've seen a number of ways that their websites handle the dreaded "Page Not Found" situation.

This occurs when resources (web pages to you and I) are moved or renamed, but links or bookmarks still look for the old URL.

Usually a dreaded error comes up that says "Error 404, resource not found" or something similar - unless you let Google take control of this and automatically suggest useful alternatives from its search index.

So what can you do about this? You obviously can't have exactly the same website structure and page naming convention from one generation of your website to the the next (and some evidently can't even have this from one week to the next).

My recommendation to handle this is to set up site redirects correctly, so that you give the user what they want. Now some websites build 'custom 404' pages that are more palatable than the generic & bland page I've already described. These will politely tell you that the page doesn't exist and usually give you a link back to the homepage of the site.
For example, here's Amazon's:










One additional step you can also carry out is to ensure that permanently moved content has a 301 HTTP server redirect set up (and don't use 'Meta refresh code in your web page)
Note: This hint is courtesy of the great O'Reilly book 'The Art of SEO' I am currently reading for review on the subject