Doing linking the correct way:
While link wheels seem to have good results at first, over a longer period you generally get penalized for it, for Google soon realizes it’s just set up for the purpose of backlinks.
Another way to look at it is like a reciprocal link, only it takes a little longer for the search engines to pick up on it and connect the dots.
The way you should be doing it is, getting lots of cross linking and link backs, through the likes of article marketing. Don’t be jumping into a big circle, linking stuff together. Google are not that dumb, they have ways of eventually finding your linking circles or link farms.