I recently took a poly for a Federal government job.  I signed a statement that preserved the agency's right to pass any incriminating confession along to the appropriate authorities.  I presume that if one were to confess to some major crime, they could be prosecuted.

it just amazes me that people still rely on this machine. You basically don't even need a machine. You could just put your hand over someones heart before asking the questions. 

The same reaction goes for a prude when sex is brought up, they turn beat red, and get all flustered. It's a funny example but its true.

retcopper,

The answer to the first part of your first question found in the penultimate paragraph of the above-linked statement. While I don't know what the ultimate outcome of this person's case was, a Defense Office of Hearings and Appeals administrative judge ruled in favor of the applicant in a similar case:

http://www.defenselink.mil/dodgc/doha/industrial/02-12199.h1.html

George:

In what way did the examiner "twist' the subjects statement regarding the porn issue and what was the outcome of the case?

Unless the examinee signs an agreement stipulating otherwise, polygraph results are not admissible as evidence of guilt in any criminal court in the United States. You won't be prosecuted simply for having a false positive outcome.

However, anything you say to your polygrapher may be used as evidence and might potentially launch a criminal investigation. There is a case, for example, where an NSA polygrapher twisted a statement by an examinee into an admission of downloading child pornography and then made a criminal referral to state police.

As for signing over rights, yes, it is common for agencies to require applicants to sign a waiver form agreeing not to sue them. This should tell you something about the ethics of the polygraph "profession." As an example, see the form used by the Los Angeles Police Department:

http://antipolygraph.org/documents/lapd-polygraph-waiver.shtml

Is there legal protection when examined by the state. (State Police) Can they prosecute if you get false readings about drugs and other things?

Don't they make you sign over your rights?