Their stated reasoning was two fold: a) that the services and information that google provides access to, even with censorship, would be a great resource to the Chinese people and would improve lives through access to ideas and information and b) that after establishing a working relationship in China, censorship requirements could be eased and the government would begin to see the benefits of free information flow.

So part of the decision to stop censorship was that their initial hopes for their China search engine evolving into a more free version didn't seem achievable. The reason that censorship came to a head now seems to have been the Chinese government's invasion of privacy, using hacking through gmail and a number of other sites to spy on human rights activists, etc.

DOWN WITH CENSORSHIP AND INVASIONS OF PRIVACY

I couldn't love Google more right now. They are in the position and actually doing what no government can and most corporations won't right now- flying the bird to the Chinese government and saying that money and profits foregone would never distract them from the fundamental ethics of their business.

Yeah there are different issues at stake- 1. Google not censoring its content on Google.cn, 2. Google shutting down Google.cn because of the Chinese government's invasion of users' privacy, and 3. (for me, pretty important) China's response to accusations and outrage at the invasion of privacy.

I'm not sure I care so much about the first. I think its a waste of Beijing's time and resources and censorship is pretty bogus but Google can take it or leave it. Its their own business decision and they'll bear responsibility for China's reaction to whatever they choose to do.
As for the second, as I said before I'd be really impressed if Google took a stand because its getting harder and harder for global political leaders to do so.
The last point is what worries/bothers me the most. China is flexing its muscles with issues like this and increasingly using the threat that accusations against it will harm other countries' relations with China. To me this seems like China's officially decided they are strong enough that, despite any transgressions they may make and be exposed for, the global community wants good ties with China above anything else, and China can exploit that. To me this is scary.

I'm not sure either but I'd venture to guess no...not right away. It seems basically like Google's card to play is shutting down Google.cn, not Google.com or other versions, including gmail.com. But then again China could 'retaliate' by blocking all google sites.

Heres a quote from an article: If Google.cn closes, some of its existing traffic could shift to Google.com servers run outside of China, assuming that the government doesn't block all access to the site. Currently, Chinese users can access Google.com, although searches for certain sensitive terms return just error messages.
online.wsj.com/[...]

I wouldn't be surprised if gmail was affected eventually, but part of me really wants to see what will happen. I think the hacking into private accounts (almost undeniably done for, if not directly by the Chinese government) is completely unforgivable and terrifyingly rampant. And while most of the world's governments are starting to buckle under their need to pander to China for economic reasons, maybe it will take a corporation like Google to be the first to really take a stand. My biggest problem is not the fact that it happened- internet hacking and invasion of privacy is probably more widespread than any of us want to believe. But the reactions so far of the Chinese government have been complete hubris- basically feigning outrage at being accused and turning to threaten its accusers of disturing relations with China. Someone needs to cut them down to size on this issue and many others.

No I see that, good restuarant comparison.