There are situations where you simply have to use a 301 permanent redirect. If you’ve started your internet marketing career with a free subdomain on a free host, then you need to redirect the site to a real domain as soon as possible.
I have never really used 301 redirects before, but a few months ago one of my websites got penalized, and from experience I know that these kind of penalties would never expire. After doing some research I found out that a 301 redirect passes pagerank (partially or all of it) and it also passes rankings.
I have also read, that if your site gets penalized and you 301 redirect it to another site, you will get the old (before penalty) rankings back.
So I decided to redirect my penalized website to a new domain to see what happens. Since then there was no PR update, but I also forgot what the PR was on the old domain. However I can confirm, that I didn’t get my rankings back, even worse, I didn’t get back the rankings which I had after the penalty.
I did rank for some keyword I haven’t ranked before, but that’s not worth mentioning.
FACT: Google does not pass the rankings after a 301 redirect.