I’ve not got any proof this actually happens, but I do it. Rather than tell Google via a 404 or some other command that this page isn’t here any more, I have no problem permanently redirecting a page to a relatively similar page to pool any link power that page might have, or even redirect it server side to the home page.
My general rule of thumb is to make sure the information (and keywords) are contained in the new page – stay on the safe side.
Most already know the power of a 301 (wonder why that page is sorta disliked by Google ;) ) and how you can use it to power even totally unrelated pages to the top of Google for a time – sometimes a very long time.
Google seems to think server side redirects are OK – so I use them.
You can change the focus of a redirect but that’s a bit black hat for me and can be abused – I don’t really talk about that sort of thing on this blog. But it’s worth knowing – you need to keep these redirects in place in your htaccess file.
Redirecting multiple old pages to one new page – works for me, if the information is there on the new page that ranked the old page