When looking at competitor websites and their backlinks, I see hundreds/thousands of low quality links pointing to their website. While my opinion of "low quality" might be different from Google's, they appear to be ranking with forum signature links (new users, 1-2 posts, off-topic forum), blog comment spam, social profile links, and article submissions. Also, if you really look in to their links, you can tell they are all self made.
Assuming on-page SEO is good, my belief has been that if you get the same backlinks as your competition, that you'll be near them in the SERPs. That is a very general statement/belief and I realize that other factors (such as content) do play in to it.
To test out how "good" these types of links were, I went out and grabbed a handful (10 or less) of these links to a couple of my new domains. Almost immediately, Google removed the domains from the index for the targeted keywords.
Now, this is great because this is what Google should do. However, how does my competition get away with it? Do I just continue getting low quality links and plaster the site everywhere (naturally) until someone of high quality happens to stumble upon a link to the site and write about it? Did I not get enough links and if I received 100 low quality links from various sources that the sites would go back in to the index? Finally, how many links are "too many" for Google to think it's unnatural? If someone spent 40 hours/week getting links, I could see them easily picking up hundreds of links each week. To me, that seems suspicious. However, looking at my competition, it looks like they get at least hundreds of links/week based upon the number of backlinks they have and how long they have been around.
On a final note, assume the domains have fresh/relevant content and they are sites a user would want to visit. The questions are more geared towards external factors that allow a site to rank. My example sites were mini-sites (5-6 pages of useful/relevant content).