A couple of years ago I wrote an article for Seochat.com about why reciprocal links were useless.
Links: Why They are of Little Value in Helping to Achieve Front Page Google Results
It now seems Google has decided to agree with me and has added excessive reciprocal linking as a "link scheme"
Webmaster Help Center - Link schemesThis is in violation of Google's webmaster guidelines and can negatively impact your site's ranking in search results. Examples of link schemes can include:
* Links intended to manipulate PageRank
* Links to web spammers or bad neighborhoods on the web
* Excessive reciprocal links or excessive link exchanging ("Link to me and I'll link to you.")
* Buying or selling links
What I find very very disturbing is that Google is taking this stance so damn late in the game.
I can imagine the sound of jaws hitting the floor as millions of webmasters learn they shot themselves in the foot.
As I have always said
"live by Google...die by Google"