Links won't hurt you unless Google detects them as paid links. For example, don't use TNX. I have heard horror stories.
Making 10000 links pointing to your site will not cause ban but it is a bad approach. If you are looking for targeted traffic then you better do it slowly so you will have enough time to follow the serps. In that case you will be able to make links with the exact anchors you need - try to achieve good rankings for as many words as possible. You will not achieve that results when bombarding your domain. E.G: Why would you make 1000 links with a particular anchor when 500 are enough for you to be first. That's a waste of resources.... so try walking on the edge - it works just great for me.
If someone starts a site today, how much backlinks should they get per day in order NOT to get penalized? What's the number? When I say links, I mean links from ordinary sites, diretories, article directories etc.
Does anyone know of anybody who has been penalized for generating too many backlinks too quickly or is this more of an urban myth?
I think that secret is not revealed yet. Everybody follows his own formula. I personaly think 1000 links per month as a start is ok (on a random daily basis - 20,40,30...).