It appears that Verizon has begun redirecting failed dns queries to its own "Advanced Web Search" page, where they of course make money from ads. This is similar to VeriSign's infamous SiteFinder service, but on a smaller scale. A trial of this "feature" began in the Midwest in June 2007. I can confirm that it has spread to Virginia since then. From Verizon's announcement:

On June 11, 2007, Verizon Online will begin the trial of a new Advanced Web Search service designed to reduce the amount of dead-end, "no file exists" or similar error messages you see and to help you quickly find the destination web site you were seeking. If you type a nonexistent or unavailable URL (e.g., www.verizon.cmo), or enter a search term, into your browser address bar, Verizon may present you with an Advanced Web Search page containing suggested links based upon the query you entered.

Several other companies are doing this, including OpenDNS , and I find it a questionable practice. With this "feature" enabled (as it is by default), you will never receive an "unknown host" error; this makes diagnosing network connectivity problems difficult.

Fortunately, Verizon provided a simple method for opting out of the service. Essentially, you need only to change the last octet in your dns servers from 12 to 14. You will need to make this change in your router if it acts as a dns server for your lan or if it provides the dns servers to the client computers via dhcp.