Fixed: http://www.mattcutts.com/blog/dont-end-your-urls-with-exe/

I'd bet it's a line or two of code that, at one point, seemed like a downright brilliant hack/idea to the engineer writing it - and, like so many other "inspired moments," it's come back to haunt...

Definitely weird, though!

Was Google trying to prevent UNIX log files from indexing? Maybe man pages? In any case this looks just weird.

log files was my first thought :).

There are also some file compression/installer utilities (Stuffit, Innosetup) that split their contents to file extensions like .0 (.1, .2, etc.). If Google avoids indexing things like .tgz and .zip, it would make sense to avoid these binary files as well.

Really you should make everything lower case, dashed delimited and keyword based.

/Latest_Fad_About_Web.2.0 should be /latest-fad-about-web-2-0

This format is expected as of 2007ish. It helps immensely in making your url packed with keyword goodness that works on all case sensitive systems and spiders.

Expected by whom?

If you're saying Google expects this kind of URI format, then they should probably say so :)