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Just remove the outgoing links from your site to any FFA link farms or their affiliates. Google has stated repeatedly that you won't be penalized for things which are not under your control. That means you will get a penalty for linking to bad sites, and will not get a penalty if bad sites link to you.
If Google penalized sites because of incoming links, the first thing that competitive sites would do would be to submit their top competitors' sites to every link farm on earth. Then Google would penalize the victim sites, and remove them from the index. That would be unreasonable and unfair, so Google cannot and will not let that happen.
If your site does get penalized because of what you did in the past, then e-mail Google and tell them you just found out on WebmasterWorld that FFA links are bad, and ask for forgiveness. I think I have seen reports here on WebmasterWorld that this works.
Take a deep breath, relax, and then go remove your outgoing links to FFA's (if any). :)
HTH,
Jim
btw guys thanks a lot for helping me out..this form is just gr8...
[edited by: Woz at 8:09 am (utc) on Dec. 14, 2002]
[edit reason] no specifics please, see TOS [/edit]
That is what they say, but it simply isn't true. Google has infact penalized sites based soley on who links to the site.
I would throw the domain away and start from scratch.
I wouldn't say that I'm calling them liars. As startup has pointed out, they have left some solid wiggle room in their public statements on the matter.
What I will say is that I have seen specific examples, which have been confirmed by Google employees, where a site was dropped or penalized based solely on the actions of other sites.
For obvious reasons, I cannot go into any specifics, but everyone needs to understand that there are certain situations where this can happen.