Just for a change, rather than a technical article, I would like to tell you a story. To begin, imagine your website is a little country bar, now let's go back to when internet began, and reciprocal linking was being done properly. Now just sit back and picture following.....
There you are running your bar, it's a fairly busy little bar with plenty of regular customers. You also get other customers who come from all directions. Some make their way to your bar using all little country back roads (from links on other websites), others come on big highway (the Internet) from big bars in city (The Search Engines).
Your customers usually stay and have a beer or two (read a few pages of your site), then decide they'd like to try somewhere different. Because you realize your customers are bound to leave at some point anyway, you recommend bar down road, telling them it is a great bar too. You even show them a little leaflet you made (your link section), which gives them directions on how to find it.
The bar down road also has his regulars, plus a few visitors from you, and a few from bars in city. He knows you send him customers, so when his customers have had a drink or two, and fancy going somewhere different, he returns favour, recommends your bar and gives them directions how to get there.
In fact, there are 10 little bars in your area that are all doing this and local back roads are alive with customers going from bar to bar (The World Wide Web). Occasionally, when someone comes from big bars in city (the Search Engines), you recommend other local bars and all your friends benefit from that visitor too.
Then one day big bar in city sent all local bars a letter saying: "We are a much bigger bar than you, we have thousands of customers, and they are all looking for nice little country bars like yours. We would be glad to recommend your bar, however, we need to know that your bar is popular before we tell our customers. The busier your bar is, more customers we will send you. We will of course be sending one of our employees to see just how busy your bar is (Search Engine link spiders).
Great you think, more new customers, more business, more profits. Oh no! Wait a minute! If you send your customers to bar down road, he would be busier than you, and get all new customers from city. Better stop sending them there. So you stop recommending his bar, and hide little leaflets that gave directions. (You feature your link section only with a tiny little text link right at bottom of page.)
You can't get rid of your leaflets, or other bar may take you off his leaflet, then when employee from city visits other bar he will think you are not popular, because you are not listed. Maybe you could change title of your leaflet, so it doesn't look like directions to other bars, that way your customers won't pick it up. (Call your links page "resources" or "partners").
Now, when your customer has had their first beer or two, you don't recommend your friend, and they don't find leaflets, so they don't know there is a back road that leads to other bars. The result? They take highway (the Internet) and go back to big bar in city where they came from (The Search Engine).
When they get to big bar in city, they don't stay there long, because they know barman can recommend some other great country bars. Why does barman do that? Because they are his busy friends, but he also recommends a few bars who pay him to give them a plug (Pay Per Click or advertising).