Reciprocal links and nofollow tag
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What happens if I link to a site using the nofollow tag and they are linking back to me with a dofollow link?
Will it give me as much power and link juice as if it was a one way link (to me) or will Google discount the link because it's reciprocal?
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You certainly would have the upper hand in theory in that situation, however nofollow is just a rule of thumb and Google's algorithm may be smart enough to figure out it's a reciprocal link.
Ask yourself if the reciprocal link is adding value to your (and their) customers? Is it in relevant content, or is it on a "Links" page? If the link is there purely for SEO, don't bother risking it - I'd say.
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In addition to what AndieF said, there's the possibility it could be seen like this too: Why should google give you any value for a back link from a site to which you're not going to attest to its credibility (via a do follow link)?
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Thanks guys. What I've done is to create a top-10 list of bloggers in one blog category. I link to each blog with a nofollow link and in return get links to my post from most of the bloggers (most will return a dofollow link). This will give my site traffic + potentially link juice (at least what I was hoping for).
I realize this is somewhat black hat borderline since most of the bloggers don't realize I've added the nofollow tag.
Good or bad idea?
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Bad idea in my book. It sounds like you're trying to cheat Google instead of win it properly, that never works out in the long-term.