It's easy to read Matt's comment and interpret that to mean that reciprocal links won't work. Reciprocal links still work. The mad dash to three-way reciprocal link schemes has been an ill-considered over reaction to the rumor that reciprocal links don't work. Recips still work.
What has changed in the last five or six years is that excessive recips became a reason for scrutiny. Prior to 2005, there was a misconception that reciprocal linking was white hat- even though Google's webmaster guidelines did not state any such thing. The thinking was that as long as your linking is relevant then Google is going to love it, even if you recip with thousands of sites.
But let's be clear about recent history. There have been bannings of specific reciprocal link networks that crossed the line of "excessiveness." In general, I think it's a good policy to cycle through various link strategies so the backlink profile isn't heavy in any one kind of link.