According to a January 21st, 2008 statement by Sjoera Nas an EU official, the guidelines are required by any search engine whose services are used by EU citizens. The only search engines not required to follow the directive, are those which use exclusively non-EU languages, such as Japanese, Chinese, etc. Spanish, French, German, and English would all fall under the directive of the law.
If you type in an inadvertent or invalild website name, you will no longer be directed to your default search engine, or receive a "Host Not Found" message. Instead, you will be directed to a Verizon search page (if you are a Verizon subscriber for internet.)
Just wait for the lawsuits to happen. Google, Yahoo, AOL are going to file against Verizon for unfair competition and potentially monopolization antics.
How does this work?
Well, by changing the way their DNS servers work in trying to find a new site, they used to redirect to the preferences of the web browser's default search engine. If we all remember, Microsoft, after intense litigation opened their Browser (Internet Explorer) to other default search engines.
Verizon is now being preemptory, by pushing a new search page, with Verizon branding. A lot of people are arguing that this is a breach of net neutrality, the principle that all content on the Internet should be accessesd freely and equally. Supporters of net neutrality believe that Internet providers may redirect users from their preferred Web pages or content to content the provider favors–such as redirecting a user from Google's search page to Verizon's.
What to do if I don't want Verizon Searches?
If you don't want to have your search results interfered with, Verizon has set up an "opt out" procedure to reset your DNS settings.