The story of Megan Meier is terrible and tragic. The poor girl killed herself as a result of cyberbulling at MySpace.
Her neighbour, Lori Drew, had created a fake persona at MySpace and used it to torment her.
It took US prosecutors nearly two years to find a law they could bring to bare against Lori Drew. In the end, they prosecuted Drew for hacking/unauthorised access - creating a fake account at MySpace breaks their terms and conditions for access. The Register express concerns that this could make us all criminals.
Google's terms and conditions expressly forbid tools which use automated queries. Google says in its help section that WebPosition Gold shouldn't be used. The same applies to other rank checkers like RankChecker or even PageRank checking scripts. A number of FireFox extensions come to mind as well.
The precedent set by the Lori Drew case means that, in theory, you could be sent to jail for ignoring Google's T&Cs.