One page sites
 

Is Google on to one page sites that have 10 Thousand link trades at the bottom?

I see so many of these. Example: http://www.pornstars20.com/

I would have to think that is a big red flag and not worth the trouble. I just don't get why so many people do it and I'm half tempted to do one just to see the results.

I read some where recently that you get penalized if you have more than 100 per page.

Google doesn't have a set limit on links/page, though they used to have a page size/link limit due to server capacity. Links/page is a quality signal IMO, but having 300 links per page in and of itself won't harm your site. On the other hand, if your 300 links/page site are propagated across 1,000 subdomains then you might be pushing it a bit.

Absolutely. That's a nice example of link spam, a ticking timebomb ready to go off any minute.

Pages like that not only hurt its owner - it pulls every one else in that link scheme network into a bad neighborhood.

Are we talking outbound links?

If pages that are being linked to in the example quoted are to suffer because of "bad neighborhood" then surely that raises the possibility that unscrupulous operators could use these tactics to contaminate the websites of competitors?

Can a page have too many inbound links and have google impose a penalty?

I should've been clearer. They won't suffer just because a competitor is aggressively linking to their sites.

In this case, I'm assuming that the sites linked to in the footer are reciprocating somehow. Reciprocation associates you with the link spam network and that association can hurt you.