Links both in and out must be relevant

There has been a lot of talk about link exchanges - people linking to others merely to gain a higher rank (hmmm, this smacks of breaking tip #3) if you are going to link to someone and/or ask them to link to you - ask yourself: is it relevant?
Any old link is not going to help you much - search engines will look at who is linking to you - they are also starting to pay very close attention to how many links you have off your web site on a page. This is being done to try and drop sites with pages of links (do you have a links page on your web site?)
It is far better to have relevant links in various places throughout your web site - on only those pages that specifically address the topic that relates to the page being linked.
Unfortunately you can't exert too much control over the way that other sites link to yours but it is worth looking at how a site usually links to others before to specifically go requesting a link from them. For example: a link that is your logo isn't very useful (search engines ignore images) whereas a link containing text, listing the topic of your web site, from a related web site would be of great value.