>> I prefer the idea of a more intelligent 404 page

There's a script for that: http://googlewebmastercentral.blogspot.com/2008/08/make-your...

Example:

  <script type="text/javascript">
    var GOOG_FIXURL_LANG = 'en';
    var GOOG_FIXURL_SITE = 'http://www.example.com
  </script>
  <script type="text/javascript"
    src="http://linkhelp.clients.google.com/tbproxy/lh/wm/fixurl.js>
  </script>