I've heard a lot of this and in my experience it's BS. My websites are interlinked and have high PR, mainly due to 1 PR6 website.
I never said it doesnt affect it whatso ever, I just said that it has less PR "weight". The goal of google and other search engines is to sort out good info from bad. Many webmasters have a huge list of sites (lets say a thousand) that have PR (lets say 3). If each site links to another, then the person should get PR5. People have abused this and so Google has built in (or so it is believed by most) that if the IP address is the same from all of the sites, the PR weight sent in is far less, and a large network, may even hurt you.