Just wanted to start a new conversation on this topic as some people has huge misconceptions that link exchanges are a GOOD idea. I want to emphasize that it's an old technique that might have worked in 2000, but it doesn't in 2007. Search engines are wise to link exchange programs, automated link programs, link farms, and the like. (For example, Google has an entire team of people dedicate to spam-detection, as I'm sure Yahoo and MSN do.) Reciprocal links between two sites are not counted as highly as one-way links. Not to say that two quality sites with similar themes are never going to link to each other. It's just that it shouldn't be your linkbuilding strategy. The best way to get link juice in the search engines is to spend time first creating quality content, and second getting links from quality sites.

What are your thoughts on dis ?

Link exchanges are great for adding relevant content that can benefit your site visitors. If its to a relevant website, I don't see why not.

Of course you still need to do your usual link development campaigns.

From my expereince i generally suggest my clients to do both link exchanges and one way links . The ratio must favour one way link though .It can be 75:25 . Also at last what really matter is the quality of links you are having .