Link Development 
Introduction
Link development should form a major part of any search engine optimisation exercise. Links can provide traffic to a website in a number of ways. Links can boost search results by increasing pagerank and they can bring visitor traffic to a site from another website. There are several types of links, we'll cover these in the following paragraphs.
One-way links
One-way links can be defined as links from site A to site B without site B linking back to site A. These are generally harder to come by as many site managers or webmasters prefer a reciprocal link. These types of links benefit sites by acquiring PR from a site without passing any back to the linking site. A good way to gain one-way links over time is to provide useful content.
Reciprocal Links
Reciprocal links are link exchanges between two sites. Webmasters and site owners often exchange links with websites in order to acquire PR, increase the total number of links to a site and build relevancy. Link exchanges are often suggested by email to a site owner. Link exchanges or reciprocal links should be done with sites in a relevant or similar industry sector. Review the quality of the sites reciprocal link programs have been carried with and ensure the links exchanged are still current. It is often good to check the links are still present, some webmasters, the nasty ones, exchange links for a month or so and then remove a link without informing the site owner. This is dubious.
Directory Links
Directory links are links from websites that serve as directories such as Yahoo or DMOZ. Some directories offer free submissions for inclusion whereas others require payment or a reciprocal link. These links can be extremely powerful and positively influence a sites' search results. Site owners should submit to recognised Directories for inclusion and should the financial means be available to buy links from directories such as Yahoo, to do so. These links are essential to the success of any search engine optimisation program.
Relevancy and Trustworthiness
Webmasters should be aware of several issues when trading links with other sites. Research the site prior to accepting a link exchange. Several standard questions should be asked:
Does the site have visible PR?
Is the site in the same or a similar industry?Is the "whois" information for the domain name complete?
How many links are on each page? Avoid sites with over 50 links per page.
How many links pages are there in the site? Avoid sites with urls such as http://www.site.com/links42.html
How much traffic does the site have?
Link anchor text
Link anchor text can be a powerful means to optimise a site. Pay careful attention to the words used in the anchor tag of a text link. If your site is about red cars, ask for anchor text that says "red cars" as the link text. Don't use "click here", that means nothing to a search engine, use the product name or description. Use descriptive text and alternate it so that not all the links have the same text.
Summary
Build links, exchange links, gain natural and one-way links by writing useful content, do your research, build more links, alternate anchor text, obtain links to both the homepage and the interior pages of a site, and if you can afford it, advertise on other sites.
Good luck!