Msg#: 3841652 posted 10:31 am on Feb 4, 2009 (gmt 0)
If you go crazy, it can be detrimental, and in the long run you are causing yourself a lot of work in monitoring link rot.
That said, well crafted anchor text, linking to a page that is relavent to the text and to the host page definately works, at least for internal links. I have been annoyed by the unexpected promotion of PageA over PageB when I put in an inline link from A to B, which intuitively should have made PageB stronger.
I imagine it will have a similar boost on external links, but it's a bit noisy to detect (if it wasn't a link, its still a keyword incidence)