There are many discussions regarding search engine algorithms. One topic that keeps coming up over and over is regarding link exchange programs. There is little doubt surrounding the importance of credible inbound links into a site. What may be unclear to some is that not all links are created equal.
Perceived web popularity is extremely important when search engines consider a site for a high rank. They want to know the site is an authority and has relevant information and one way to determine that is if other sites cite or quote (giving credit by linking) a given site. This means the link to the site is found within the content or at the foot of the content.
Search engines have wised up to link sharing and do not value it as highly (some claim that no value is given for a simple link exchange) as content linking or citing. In other words if a site shows up in a list of other sites they all share the page rank and very little value is passed along to the site(s) being linked to. On the other hand, if a link is surrounded with great content and the page is valuable, the page receiving the inbound traffic will receive a higher value.
Write great, valuable content or applications, and dedicate time to find sites who will cite your page or site. Be leary of link exchange requests, especially from a page that has a low page rank. It won't help much if at all, and is valuable time wasted. Write content and provide tools that other sites link to. If a tool is valuable people will link to it. Become the authority for great information in your area. Post content, comments, and links on sites with an existing great page rank. Be sure the site is a "dofollow" site and you'll see great results over time.