The 301 redirect is a really important tool in a search engine marketers kit.
Redirects are required whenever a page or URL needs to be moved, and you want to tell a search engine, or users that have bookmarked that page about the change in this address, rather than them confusing just reaching an error page.
I’m not sure that I have come across an instance when using a different method than a 301 or 302 would be preferred, but that might just be because of the situations that I personally have encountered whilst working on my clients’ websites – there may be situations that these are preferable.
Anyway – redirects are necessary when you make changes to a website structure or if you find yourself needing to change your domain name – and from an SEO perspective, the notification to search engines that this redirection is “permanent” (301) rather than “temporary” (302) is very important, as otherwise they essentially wont follow that redirect and find the new page that you want them to turn their attentions to.
Whilst this 301 redirection is absolutely important, I have felt for some time, based on my almost 4 years in the SEO industry that performing these redirects doesn’t transfer all of the trust and authority that the previous page had to the new one. This is based on seeing falls in rankings and traffic for clients for a short time after moving a page, or changing to a completely different domain, and as much as anything else a “gut feeling” that performing such an action may cause some decay in that page’s authority during the transfer.
In a recent interview with Eric Enge, Matt Cutts, the Head of Webspam at Google, covered a number of interesting points with a good amount of detail (although it was such a lengthy post I did have to read it in 2 sittings), but one of the most important parts of this from my perspective was Matt saying that he could see that a 301 redirect would not pass 100% of the previous page/site’s PageRank to the new page/site, and later confirmed to Eric by email that there was some loss of PR through a 301 redirect.
For the most part, it’s usually not that difficult to get that PageRank restored in the longer term – you can ask webmaster that linked to those previous resources and update their links to the new locations accordingly and you can build on the trust and authority of the new website by gaining good quality links to that domain.
But unless there is a really good reason that a domain or page needs to be moved, I think that this is as good a reason as any other not to do it!