you are mistaken. This was the case until about 2008 or so... here is a quote from matt cutts.

"On expired domains, Matt said Google tries to reset pagerank/links for all expired domains to zero when they are registered by someone new. They don’t try to penalize the expired domain, but they also don’t want to give credit for the previous owner’s links."

http://www.seo.com/blog/conferences/matt-cutts-does-domain-r...

This is actually a major selling point for WHOIS privacy services (for SEO) these days, if you maintain the domain with the same registrar and continue to use their domain privacy service, the records won't change and Google won't cancel your rankings. So, if you're thinking of selling a well-ranked domain, add the privacy services, because they typically boost the sale price.

I could be wrong about this, but I think I remember reading that Google became a registrar in part to get info behind the privacy services.

The keyword there would be "tries", I'd wager...

Thanks for the correction! :)

how would that work? I mean, the old links would still point to it so the juice would still flow in that direction. What if the content stays the same but the owner is different?

By discounting all links from before the date it expired.

People used to snatch up expired domains and use the internet archives to put back up the same content and than slowly add links to their sites...

Because of this spam, Google just ignores links to a domain that expired that are from before it went live if the new registrant is a different person I presume but don't know.