Can an entire directory be considered as Bad neighbourhood . What would happen if a blog links to such bad neighbourhood directories ? Can anyone shed some light on this ?
If you have a shared hosting, you must to share the IP with a lot of other websites. The best way is to register a dedicated IP. Price: $2-$3/mo.
You need to be clear with your definition and association with a bad neighbourhood. Shared hosting doesn't make a site/directory bad. Regarding linking to such a site/directory doesn't really affected you, again it depends from case to case.
Shared hosting is not "bad neighborhood". Say, your site is about education and you link to porn. That's a bad neighborhood of linking. Just to sum up an idea. At Solicitation and Announcement, whereas a lot of sites especially the .info's, (not all) directories that just approved sites without editorial standards are a bad neighborhood example. Directories that usually charges an amount for review are what I consider a good link. But then again, there are sites that even they are paid they are not worth it. Best thing is before anything else, is to scroll on the inner pages of the sites and see how are their editorial standards. Just my 2 cents.