Reciprocal Links are an important factor in the ranking equation.

Example: If your site sold software a link from the Microsoft site would be seen by the SE robots as sign of your site's importance.

The key to success is links from sites that complement your keyword product or service. So a link page with 6 good links will outrank the 'link farm' page full of links that have nothing to do with your keyword goals.

It is important that your link page be only one level down from the index page so there should always be a hyperlink from the index page pointing at the link page.