Peat, there have been lost of angry replies, and while this situation makes me a little mad too, I think i can briefly and succinctly sum up the problem people have without using harsh language (though it's tempting):
1) Your automated system automatically issues takedowns when what it should do is send potential violations to a human for confirmation before any takedowns are issued. Lots of people probably won't fight takesdowns, which means you win by default. Many people here feel that's dirty pool, that the original poster is only getting the decision reversed because he got attention on Slashdot, and if he hadn't, he would have been out of luck.
2) Even after the automated takedown was disputed, your system sent an automated response falsely clamining that the piece had been reviewed and confirmed. That, as other people have pointed out, was a bald-faced lie. The fact that Rumblefish even automates its responses to takedown appeals is incredibly annoying. Clearly, your company wants to make it as difficult as possible for anyone to appeal. Can you see how this might infuriate people? It's not just "talk to the hand, dude", it's "I can't be bothered to say 'talk to the hand', so you can talk to my robot's hand.'" Basically, you clam to have judged the situation, but your judge is a just a parrot who squawks "Confirmed!!" at any dispute.
3) It appears to me, and apparently some others, that your business model is unsustainable if done responsibly because there's a fundamental conflict. If you employ enough humans to do it with honesty and integrity, you won't make any money. But if you use tons of automation, you end up with your pants down in fiascos like this. I think I speak for some others when I say that it seems your company cares more about making money, no matter what little guys get hurt, than it does about integrity. Obviously you can get away with this behaviour because anyone with two brain cells know that in this country only people with money can afford to buy the law they need. But it doesn't make it right.