Reciprocal links can be viewed as "you scratch my back, I'll scratch yours", and Google will not place so much value on them.
Far from being bad, they are beneficial to your site. If the subject matter on both of the sites is related, this will carry far more weight that if you are linking to something totally unrelated. Generally speaking, the more links in the better, however the concentrate on building quality links.
When it comes to backlinks (a link from an external site to your own), these are the best by far. For someone to give a link to your site for nothing they must attribute some value to the site.
If you were to link to place a one way link out of your own site without reciprocation, it would need to offer some value right?
If it was your business, you you would be promoting a genuine service up to your own standards. Google basically thinks the same way and a lot of incoming links is a great way to climb up the rankings.