Here's an article in the Post yesterday demonstrating the increasing influence of blogs on the mainstream:
Calling in Pros to Refine Your Google Image
One thing to consider is that Webmasters can manipulate search engine algorithms to have their sites come up as one of the first listings. So, no matter what companies like ReputationDefender.com could do, there will always be malicious coders who will ruin any attempts that you fork over thousands of dollars for to improve your online prestige. What's even more funny is that people found a market in making people look good on the Web. My take on the situation: you can't make people like you.
Here's a good read on how search engines work
And here's a Wired.com article about search engine manipulation