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I wonder this same thing because I've read on different SEO forums that link exchanges can kill traffic. I think the old philosophy was if a bunch of sites that had similiar content were all linked to another site, it's like they would consider the site linked to an authority and give it higher ranking...on some of my sites I did hard link trades on others I did no trades, and on others I did the automated software where they add my link to their site then their link to my site and I get an email to approve it and all three had mixed results. I'm interested in what others say on this. I still do a mixture, but no some much concentrated on link exchanged since I've read so much bad stuff about it. Especially if you're trading with link farms. My understanding is the best way to do so is in the text of an article, a so called "passive" link or if you do hard links, you gotta make sure the <href=>This text here</a is more descriptive because that's what some are saying is what google goes by when they rate the link....make sense? Doesn't matter because it changes every day... =)
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