http://www.google.com/support/webmasters/bin/answer.py?answer=66356 That means that link exchanges are going to impact negatively on SERs?! But how, why, and since when?!
There has always been that assumption. But consider this, how can Google know the value that attributed to a specific reciprocal link? What I mean is how can Google determine our intention? They simply can't, unless that is they they use two criteria; Volume and relevancy. That said, if you choose your link partners carefully, which means that they should be relevant to your website's content (relevancy), and if you don't clutter your pages with outbounds (volume) you will be alright.