I have a number of small sites all hosted on the same IP address. Is there any point having three-way/multi-way linking [e.g. not straight link exchange] between them, or will Google totally discount and ignore that? Would there be an advantage to getting another IP address on the same host and splitting the sites between the IPs?
Three way is used in an attempt to "trick" the SEs into thinking they are unrelated. Surely that purpose is defeated if they are all on the same IP? Another IP on the same host does not necessarily distance you enough. I would suggest you don't interlink your sites except where such interlinking will benefit the USER directly (relevance, relevance, relevance).
Merkersarl is right. You could also read the abstrast of the google patent to get more information. Not everything in the google patent is currently in use, but they also talk about having the ability to check ownership of domains that are hosted on different class c IP's to discover attempts to inflate a sites popularity (PR) & serps. (although they are not doing it accross class c's yet, imo)
Somebody is clearly checking domains out, I regularly see whois referals in my server log. I'm not sure this is always a "lost-lost" proposition though. I've had instances where I received page rank based solely on same server links. There were no other inbound links. The common generality with those sites however, were they were similar in topic, though not the same. And the content was unique for the web in whole.
Three-way links on the same IP address would not benefit you. Instead go for a link from a different c-class IP and it should help you.
perdrix, I don't believe PR was the issue. You can gain PR but lose ranking and, if it's ranking you're after, I don't believe multiple links from the same Class C is a very good idea.
I think you could get away with it if you mix it up with three ways and recips and also get link to and from outside your little family of sites.