Google has been beta testing the idea of sending out emails to individual site owners that have been banned. Sounds like you are one of those lucky beta sites that got a heads up. Google doesn’t ban sites for exchanging links (unless maybe every site you link too is also banned). Since you seem to be aware that you are cloaking, I would imagine that would be it. My understanding is that you must remove the offending tactic (cloaking, hidden text, whatever), then apply for re-inclusion, then wait a month or 2 to have the ban lifted. The waiting period seems to be to make sure you don’t just turn around and do the same thing once they lift the ban.
You can probably find more complete information on SEOchat.