3-way link exchange is definitely the best method of gaining high quality backlinks for your site So, yes, everyone should do it.
No problem. I assumed that you misunderstood something I said.
"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." -- Benjamin Franklin
I found a posts that says what are the exact things you need to look through while exchanging links. But the fact is that Google still does not approve of link exchange as a means of promotion. Links should come naturally.
As for Google, they are keen on getting links naturally just like Trunk mentioned. I have done two way link exchanges in the past (3-4 years ago). However, in the past two years I have done some three way link exchanges, which is a better option IMO.
To me, it seems like Google is being very proactive when it comes to links. Obviously, the best ones are natural, quality backlinks. Yes, they take more time and more work, but that's why they're so highly regarded. With the way Google is about links, I personally wouldn't try any exchanges. It may take me longer to get backlinks, but I'd rather be safe than sorry.
I tend to post to this forum and my own blog and other places, I think that is what works best. So it is more natural.
As per my experience Link exchange is the one of the best way to increase your PR and alexa. But you have to do link exchange with relates sites, Which have good PR, which is a good quality and proper site.
LBS (8 July, 2010)