As we all know, all search engines frown upon reciprocal links. Yahoo is currently going through a patent on how it identifies reciprocal links, its heavy reading, excerpts/abstract from it follows:

A method for identifying reciprocal links is provided. At a particular host, the set of hosts which link to the particular host and the set of hosts to which the particular host links are determined. The intersection and union of the two sets of hosts are also determined, and the sizes of the intersection and union are calculated. The concentration of reciprocal links at the particular host is calculated based on the sizes of the intersection and union. A ratio of the intersection size to the union size is used to determine the concentration of reciprocal links.

You can see the full description at the US Patent office here.