like you said about link pages, if you set up your directory you should have no more than 20 to 30 different cats. If you do more than this your links are not going to cary much weight because of a lack of relevence and going 30 links per page. Most sites would attain top 10 not going more than 2 pages deep per cat.
This would not be near enough ads to draw any kind of flag from any search engine.
I have blasted out 200 articles in a month for a site and this brings a lot of links to a site (and traffic
) and have done this several times.
When i worked for major online retailer we added 1000 plus links per day for 119 days without drawing a flag.
The only way you will get punished for links is recips, and that is only if you link to a bad site. This can get you in trouble quick and is the # 1 factor in going to 1 way links. There is no danger in 1 way links.
This is the reasoning for the flags for 2 many pages, there were some spammers using dynamic webpage generators for internal links with a text link pointing back to the index page. This means they were from the same ip address which is another reason it drew a flag just as matt talked about. or they had a few sites on just a few ip addresses and were generating thousands of pages with links to any specific url's home page.
This is refered to in the T.O.S. as a linking scheme and it will get you banned.
The type of sites he is talking about is sites like myspace where the profiles are dynamicaly generated for each profile, and when they see the system they clear it. Think about it. For every myspace profile there are at least 3 pages. The home page, the profile page and the blog page. this is just the main 3 pages. There are actualy about 10 or 12 pages per member. with the growth rate of myspace it would draw a flag unless it was cleared by the engineers of google and others.
Your best links will always be 1 way because of the saftey factor of not having to risk linking to a bad site. But for the most part. Recips will do the trick since most keywords for the average webmaster are not that tough to hit and there is a lack of proper seo on the competiting sites.
Hope this helps.
Jim