A good inbound link is first of all from a relevant and high-PR site. It has the target keywords in the anchor text and around the text at best. Moreover, the link points to a landing page, which is especially created for that keyword. Hence, don’t use any duplicate content or exact match anchor text all the time, which will only harm the quality of the link.
A link farm basically is a group of websites which are interlinked with each other. Google has introduced a filter, which sorts out all link farms. Hence, if you participate in a link farm or create one, then be sure to see your rankings fall down the ocean.
If you trying to get a reciprocal inbound link from another site, it could happen that the inbound link has a no-follow tag (rel=”no follow”). This coding piece allows the webmaster to control whether the search engine should follow this link or not.
Since the Panda update, Google has started their attack against paid links. A heavy backlink profile with numerous paid links and less natural inbound links will hit your website very badly and result in a heavy drop of rankings. Hence, make sure you mainly focus on natural links, which will give you the results you want.