artifically manipulating links in any way would be against google guidelines ... but it's not against adsense TOS. i say go egyptian if you've got a system to bring you more traffic.
Any scheme where other webmasters are linking to you for the purpose of the link benefiting your site and not genuinely because they believe its of value to their website visitors.
Pyramid linking ultimately sucks unless you're one of the first ones in the pyramid, tho, so I personally wouldn't do it, unless I was the one starting the pyramid to begin with.
He isn't talking about that type of scheme (I hope). Before that website was started (is it even still active?), pyramid linking meant triangle or 3 way linking A --> B -->C -->A