I get so many requests for link exchanges I don’t even read any of them at all.
I consider links to be what google intended them to be – a vote for a site I think to be exceptionally good, or a way for my visitors to access additional, pertinent information.
Google is fickle and no matter what you do, you will go up and down. IMO, the worst thing one can do in the long run is to try to trick it.
I built my site for visitors, and they thank me for it by coming around whether I am on page 1 or page 5. For me, page one means accelerated growth, page 5 to 10 means continued profitablility.
So I keep clean and ride it out and it works for me.
There are business models based on links and they do seem to work for some people. So I am not saying it can’t be done.
I just prefer to cater to my visitors and make sure they find me a valuable resource, bookmark me and keep coming back. That allows me to ride out the ups and downs of this business.