jchampliaud - 10:16 am on Dec 17, 2006 (gmt 0)

"It's not clear if Google punishes you for having a reciprocal link directory on your site or if they just ignore it."

That's a very good point. I can't see how they could punish a site because it exchanges links with another related site. I'll still do link exchanges as long as I believe the site I'm exchanging with is useful to my visitors.

Another point is that link exchanges aren't just about Google search results, people not just bots click on links.