Zivush - 6:25 pm on Jun 18, 2012 (gmt 0)
I am not here to promote plugins, but to tell a similar case.
In one of my WP sites, I use two Related posts plugins.
Why two? To make a diverse/dynamic links:
1. Contextual Related Posts plugin (4 links with thumbnail images) at the bottom of posts.
2. ELI's Related Posts Widget plugin (4 links) on the sidebar. This plugin takes similar posts from the associated category.
I don't know if there's any correlation to Panda/Penguin, but it works quite well to increase pageview per visit and time on site which makes an indirect effect on SE, I guess.