I keep reading that it's good to link to a popular site targetting the same keywords as your site. How exactly will this help? Does Google see the association as a good thing or are you really just draining your site's PR value by giving away a link without getting one back?
Also, several times I've read on this board that your site can be hurt if a PR0 or banned site is linking to yours. How can this be possible? I mean, if it was, couldn't I purposely create a site, get it banned, and then link to all of my competitors?
Finally, does the category of outgoing links on your site make a difference? For example, will a "widget" site linking to 10 other widget sites have an advantage over a widget site linking to 5 widget sites and 5 random sites?
Linking out to a popular site won't have any impact on your site. For example, if you have a news related site and you link to cnn.com, surely they will be happy about it, but there won't be any benefit to you.
However, if cnn.com were to link to you, you would benefit bigtime. Even more so if they put keywords in the anchor text that points to your site. If those keywords match the phrases for which your page is optimized, even better yet.
Google is on record saying a PR0 site linking to your site won't hurt you. But your site linking to a penalized PR0 site will hurt you.
The theme of the site to which your site links won't impact on your own positioning. To the best of my knowledge, anyway. Good luck.