You want links, I want links, we all want links. That's true whether you are an unprincipled spammer who doesn't care who the links are from or too or how he gets them, or someone honestly looking for good, relevant sites to exchange links with.
Exchanging links can be useful. If you link to good quality content, you are helping your readers find other sites they may be interested in. Likewise, appropriate in-bound links may bring you new readers and increase search engine rankings.
So, how do you get links? You can do it passively: I gathered a large number of in-bound links at my aplawrence.com site without doing anything - people just linked to the site. You can search out sites that seem similar to yours and write to the webmaster requesting a link. I get a few of those almost every day; most of them are obvious spammers that I reject immediately, but now and then one is actually worthwhile and I will exchange links. You could visit the various "link farms" who will automatically accept your link in exchange for you doing the same for them, but that's probably the very worst thing you could do.
LinkMetro says it has the solution: a free account there lets you list your site, specifying the types of links you are looking for. Other members can offer to exchange with you, and you can browse the directory looking for link partners. Conceptually, there's nothing wrong with this: it works, and the account is free, so you lose nothing (except being annoyed by constant offers to upgrade to a for-fee "advanced" account - don't bother).
Update: long gone.
You can find legitimate link partners at Link Metro. Unfortunately, the vast majority of sites offering links there are spam sites or ecommerce only sites that you probably have no interest in if you are a legitimate, content based website or blog. That diminishes the value of Link Metro greatly, but as it is free, that may be acceptable to you. Keep in mind that you will get hundreds of junk sites offering to trade links, and it takes time to go through these to reject them. Once in a while you'll find someone you might be willing to link to, but it's not all that often.
Another problem is that a site may want you to link to a specific page while you want to link somewhere else. For example, a commerce oriented site may have a content section that you would be willing to link to, but they may request a link to their products page. Link Metro does provide a messaging facility that allows you to write to the site to make such an offer, though I wouldn't expect that many of the member sites would agree to adjustment: too many of these look like outright spammers.
Still, the price is right, and if you can find a few quality partners, you have increased the value of your site to your readers and search engines alike, so it might be worth taking a look. If enough legitimate sites started using this, it might eventually attract enough good sites to be worthwhile. Right now, I think most legitimate sites will get disgusted very quickly, but perhaps you have more patience than I do.
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