At one time, I signed up for a link farm. Not really getting any benefit from it and thinking it was negatively affecting my rankings, I removed myself from the farm. It's been a while since I checked backlinks and a search on yahoo still shows hundreds of incoming links to my site from this farm. Since I don't have any html files displaying this farms links, will having all these backlinks from bad neighbourhoods still affect me and is there any way to clean this up or is it better just to start with a new domain?
You may have been penalized for acquiring too many backlinks too quickly which is a red flag to the engines that you are involved in link farming. I don't think anyone here short of a google engineer can tell you if you are still feeling the effects of the penalty (assuming there has been one applied). Do you have any reliable stats from before and after you were involved in the link farm? Are you receiving any traffic at all? How old is your domain? If you start over with a new domain you may feel the "Google Sandbox" effect which may be worse for you than continuing with your own domain. Having said that there are many in the community who feel the Google Sandbox is a myth so take what I am saying with a grain of salt. If you PM me your domain I will check it out and see what I can see. A screenshot of your stats recently and before /during your time in the link farm would be a big help also.
When trying to figure out whether these bad neighborhoods linking to your site is a bad thing remember that anyone can place a link to your site on their site. The problem lies in the fact that 100's of sites had a link to your site in a relatively short time (too short to have been acquired naturally in most cases). The removal of the reciprocating link will help you no doubt, but the links to your site would /should be devalued if they recognized the link farm footprint and may continue to hurt your site depending on how the search engines handle this behaviour.
Right this is something I am not totaly clear on so maybe someone can clear this up for me. When you read articles like this one. http://www.webopedia.com/TERM/L/link_farming.html They make out like just cos you link to sites that have no relvance to your site you are a link farm. Now if this is true how come so many people do it and how come you benift from it surely if it is bad search engines would penalize you for it which as far as I know they dont. Could anyone clear up what is classed as a link farm and can you get banned for it?