goodroi - 2:14 pm on Nov 6, 2012 (gmt 0)
Interlinking relevant websites that each provide significant value is not a bad thing. For example WebmasterWorld and Pubcon are interlinked. They complement each other and the interlinking is useful for visitors.
When you rely too much on that interlinking and do not develop a quality backlink profile with good diversity then you are very susceptible to algo tweaks and you are probably going to have a bad day.