SEOsoon - 11:15 am on Jun 21, 2011 (gmt 0)
I think that having reciprocal links is a quite natural thing. As far as I experienced, reciprocal links do not have any negative ranking effects except cases where there is massive abuse of it.
But on the other side, there are no positive ranking effects either ... you could achieve good rankings with reciprocal links many years ago, now they won´t boost your rankings at all.
By the way, panda update had nothing to do with paid links ...