I wouldn't do too much reciprocal linking. A lot of people who were doing this with Linksmanager incurred penalties and Google advises against excessive reciprocal linking. Do some reciprocal and get some directory links but really, you have to pay money to make money. If you have a good, converting site then paying for links on text-link-ads, linkworth or buying adwords should help you make more money. Don't forget about the big picture.
Not really. If you spent some time on high quality content people will link it all by themselves. I am tired of dealing with snotty webmasters to the point that this is almost my only source of links (no more exchanges). Works well though. I'd rather spent the time on quality content.
If your link is on pages that get a lot of traffic, it's related to your site and your site converts well then I don't see why it wouldn't make you more money.
Yes you are correct. What I meant was the only "free" linking technique I use is link baiting. Buying links makes sense too, but I don't like the hassle of exchanging links. Too many dishonest people. What I meant to say: The effort I previously spent on finding linking partners now goes into content creation. It may not be quite as effective, but its one way links and I have had some good success with it (sometimes I am surprised about the referers in my logs). Currently I get the most links for free (one way) through link baiting.
I concur with most of what is said here. I might add check your competition out at alexa with the "sites linking in function". Add your links where they are listed or copy their advertising efforts. Marlon
Link directory and article submission. For link directory submission, you can start here: http://www.directorycritic.com/free-directory-list.html
Free directories and article submission. You can visit this section http://forums.digitalpoint.com/forumdisplay.php?f=65