Everybody keeps going on about Google penalties if you build link wheels, penalties if you submit too quickly etc etc So if I pay a backlink provider to submit all my competitors to 5000 directories and build a link wheel to their site: will that make way for me to get to #1? I doubt it very much, I think Google have got to be more intelligent than that. Surely they would just omitt suspicious links and give no relevance to them, making spammy backlinking just a waste of time rather than dangerous in terms of rankings. Anybody here actually had a penalty from Google as a direct result of 'spammy' backlinking? I would love to be proven wrong, and if I am then I just think it's wierd that Google would do it. I'm not talking about duplicate content, that's totally different obviously because you control your sites content, but you can't control what other people do off-site.
As you say, those links will probably be ignored. However, if it's a niche known to be spammy (viagra etc), you set xrumer to 'build' 1 million links, and half of those are to bad neighbourhood, then it's likely that you'll set off the spam klaxon and the site will get penalised. Google doesn't care who did it, they do care if the 'integrity' of the results are being manipulated.