I have read in a few places that it is very difficult to get high SE rankings in either Google or Yahoo if you have affiliate links on your site. Any opinions on this would be much appreciated.
Totally false. End of story. Maybe to get into Y! Directory and DMOZ, but even then, its been done tons of times.
affiliate links dont effect your website, but if u make website only for affliate with full of ads and links they may think site is junk