I'm trying it with one of my sites. It's just a parked domain anyways though so it can't really hurt it even if google does penalize it somehow. I will report back with a percentage of increase or decrease in traffic.
I have several sites that I just use for experiments and tried a site similar to one that you did once. It promised to create something like 3000 links and also ran off a list of them as it did. Most were whois sites (and similar), but later I started to notice that affiliate type links were being produced. I never bothered to check the code, but I have a feeling that with the way it was working (through Ajax) it was probably doing "cookie stuffing" or similar. So that is probably how the guy was getting paid.
What is the quality of those links? Now a days, bad quality and automated links are not helpful at all!
Just by hearing instant just sounds problematic to me. Everything take time. We could never rush into things.
What he claims isn't strictly true and you've nothing to worry about. There is a difference between penalise and algorithmically discount something.
The outcome is that no one is really sure. Something exciting to try if you dont mind risking your content. Thank you for the feedback.
I doubt google will ding you, google does not know if you or your competitor is submitting links; If you do not get value, then you get zero, but google is not going to turn you into dust.... a backlink is a backlink, and sometimes you do not even control where you will get your next backlink. So if you get something, then great, if not, then what do you have to loose...? Yes, high PR sites are much better, but what legit high PR sites are going to link to your low pr site? You got to start somewhere, or you may be at the bottom of the food chain for a long time....
hahaha they sure are crappy backlinks. How about some quality links free? http://www.autobacklinkservice.com/