When users or developers request a bike optimized route, MapQuest:

• Avoids roads where bicycle access in OpenStreetMap is set to false
• Avoids all limited access highways
• Favors bike specific paths (road segments that have bicycle access only - no auto or pedestrian)
• Favors walkways with no auto access
• Applies various weights to roads based on the maxspeed tag (ex. favors routes where maxspeed <= 30 mph)

Bike routing commands have been added to the Open Directions Service Developer's Guide.

MapQuest began using OpenStreetMap data last summer and started a $1 million investment fund for open source mapping.

Hat tip to Programmable Web