I was reading through the threads on this page and would like to add a little unsolicited advice.
Let me preface this by saying, I am a Certified
SEO Analyst and have been in the business of search engine optimization for over 8 years. I have trained with
Bruce Clay for the last three years as well to learn advanced
SEO techniques. I have a long list of satisfied clients who have greatly benefited from the principles and techniques I applied to their site.
So, on to my advice. What Marty is saying here about linking is mostly true. Quality links to your site from sites with related content can help your site rank better. However, Google has stated that they are aware of about 95% of all paid links and will not give link popularity points to those links. In other words, a paid link will not contribute to your ranking, so only do it if you feel it will bring you qualified traffic.
Reciprocal links are considered paid links because you are bartering for a link. "You link to me, I'll link to you." So, only provide a reciprocal link if you feel that you'll get good traffic from that link. Of course, there is an exception to this. Paid links from TRUSTED sites
may help your ranking. And as you probably guess, the search engines are not going to tip us off as to what a trusted site is. However, we know that sites like Yahoo's directory is a trusted site. The Thomas Register (a directory for Industrial companies) is a trusted site. Bruce Clay's site is a trusted site. Basically, a site that is considered a subject matter expert, provides quality information on a subject, has a good amount of traffic, has a good amount of quality links, etc. could be considered a trusted site by the search engines.
You may have also heard the myth that incoming links are good but outbound links are not. This is also not true. But you also have to be careful of who you are linking out to. Just as you primarily want incoming links from sites with related content, you want to link out to the same type of sites. If you link out to a trusted site, that might actually help your rankings by showing that you are sharing in the information exchange by providing your visitors with a link to a high quality site.
With that being said, here's my take on what Marty is asking. GU may or may not be a trusted site. If not, then linking back to the site is not going to help or hurt anyone's rankings if it is a reciprocal link. Also, a side note on having 1000 links from the GU site and providing one link back. The search engines know if 1000 links are coming from the same site or from 1000 different sites. More link popularity points are provided from 1000 links from different sites than 1000 links from the same site - regardless of how many different pages your link is on. So, let's say GU links to you 1000 times and you link back once. It's still reciprocal and if GU is not a trusted site, you don't help them rank better and they don't help you rank better. It's still a great source of traffic, though, so go for it! Everyone wins, no one gets hurt. But, let's say GU becomes an authority on the subject matter and in search engine land they decide GU is a trusted site. If you link to them and they link back to you, it's a win-win for everyone. A trusted site linking to your site is a great link. If GU is a trusted site, they are going to rank well regardless of whether you link to them or not because being a trusted site means they already have tons of quality links (among other things). So you don't risk losing your rankings or being out ranked by linking to GU either way you look at it.
As long as there are web sites and search engines, there will be competition for the top spots. Do your best to provide quality information to your visitors, and link to other sites that provide quality information on your topic. Always think of your visitors first and provide the best user experience and the search engines will rank you accordingly.
I hope this information was helpful! Good luck to you all in your ventures and Marty - great site!
-Allison
SEO Director
Upright Communications - Search Engine Optimization and Internet Marketing