The argument that the surface record is biased is based upon photos taken of the temperature stations by Anthony Watts and little else, so it's hardly even worth discussing. However, I came upon a discussion by NASA GISS on the subject which I found interesting:
"Don't such concerns cast a shadow of doubt on the NOAA weather station data? Initially, perhaps, but not after the data have been carefully tested in several ways. First, Hansen's team (and others) finds good agreement of the weather station data with "proxy" data sets that are sensitive to surface temperature changes...Second, Hansen's team "cleans" the weather station data by finding and filtering out flawed data entries... The team uses satellite data to determine if a given station is in an urban or near-urban location. If so, then the team uses the nearest rural stations to determine the long-term trend at the urban site. If there are no rural neighbors, then Hansen's team throws out the urban station data."
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