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They are not a good way to get backlinks, Google takes quite a dim view of traded links, not as bad as paid links (which can make your site dissapear from the index completely) but you wont rise high in the rankings by using them.
You are better off building 'natural links', get involved in other sites in the same niche, comment on blogs (even ones with 'nofollow' have a value), blog yourself, twitter etc etc
I managed to get a site listed on one of the highest ranked blogs (according to Alexa) with a bit of work, that one link was worth more to my ranking than a thousand exchanged links would have been!
Of course, you could just hire me ;)
Dave
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