Your neighborhood better maintain a certain level of trust — both trust IN and trust OUT — or you can kiss your rankings goodbye.
To put it another way…
1. You have six trusted links to your site, it’s ranking on page 2.
2. Then, add 10,000 untrusted links to your site. These should theoretically just “not count”, and you should still rank on page 2… right?
I think Andy’s example is the extreme, but does highlight how inbound links can hurt your SEO efforts. Flip it around – 10,000 trusted links to your site; 6 untrusted links – and you don’t have anything to worry about.
So, do inbound links “hurt you” – in true, cop-out fashion that is the Marketing Pilgrim’s style – it depends.