UK SEO and Internet Marketing Forums
Links -Buying, Exchanging

Google now penalises 'bought links'
But let us first of all identify exactly what that means.

1 - A bought link is NOT..... One where you pay a guy to submit your site to 500 SEO friendly Directories.

Neither is it a 'quality link' purchased in a Directory like Joe Ant, Yahoo or Green Corner. These directories ensure anchor text and relevancy.

IT IS - A forum poster that offers to sell you links based on the old toolbar pagerank - that myth has been well and truly blown. A high toolbar pagerank link is no different to a zero. It depends on Anchor Text and Relevance.

Google is not 'outlawing' this practice it is merely saying 'Do so at your own risk'.
Google will be looking at forum posters offering these purchase related posts. That is not a guess that comes from a source close to Matt Cutts.

Exchanges - also monitered. But reciprocal links are dead and have been for some time.

My opinion:
I think that's the key, all in moderation - and good reciprocal links sometimes happen of their own accord. I mean, I gladly link out to relevant sites (maybe too much), and some of them happen to link back naturally which I believe strengthens your relevance. It's part of a natural linking pattern as I see it.