Hi, I'm in the process of learning SEO and have repetitively been told to stay away from reciprocal links(Links which are returned) So website x to y then website y to x linking to each-other. But just the other day i came across a PR9 site - http://www.prchecker.info/ who are offering reciprocal links with keyword rich anchor text - to them !!! How are they getting away with it, it seems to be successful for them. They're offering the links here - http://www.prchecker.info/add_link.php.
Some reciprocal linking is natural. For Example SEOMoz & Distilled are in partnership and they routinely will link back to each other. What I feel is link to helpful sites naturally and ask them to reciprocate the link is not bad.
"Some reciprocal linking is natural. " Sure ! And i agree. But there's a fine line, if you visit the link in the o.p you'll see that they have hundreds of reciprocal backlinks and they're clearly there to pass-rank; they even say "PRchecker.info Web Hosting & Webmaster Resources directory provides many useful links to web hosting, web design, web promotion, software and webmaster related web sites as well as the way to exchange reciprocal links and thus to increase you website page rank and traffic!"
If reciprocal link is given with the purpose of linking, then its bad. If its really useful to the site visitors, there is no harm in it.