We personally in the past few years, have not seen any site that is heavily involved in old school link exchanging, or involved in the paid link market, drop in ranking whatsoever. I know a lot of people recently saw some sort of round of knock downs for sites engaged in paid links, but we did not. Especially during these “penalty” threads, it’s important to mention this. The sites, over the past year that we see doing better, relative to other sites, are in fact those sites that are engaging in aggressive link building tactics, through exchanges, purchases and even interlinking between sites.
“Linking”, of any sort seems to help (despite a lot of “talk” to the contrary). Maybe its time to start thinking that a lack of active new linking, just may be more of a risky strategy.