the question of which content will rank higher depends on a number of factors - the authority of the site hosting the content, the location of that website in relation to the person doing a search and the relevance of the website to the person doing a search... I write for one site that shows up second to another site that syndicates the content from the first site, but in that scenario, the site with the higher reputation is driving traffic and rank back to the first, so it's a legitimate price to pay to build reputation.
I think where the illegal scrapers are concerned, you are right - Google will sort it out and, as +Jim Connolly
says, it will become less fruitful for them to do. The whole practice of filling a site with scrapped content just to gain affiliate revenue from Adsense ads is a key practice being targeted by Google. That's why so many blog networks and scraper sites have been de-ranked lately.