This is done constantly on the web. You can create multiple sites and then link them to one another in a circle. A -> B -> C -> D -> E

You normally don't want to do an A <-> B setup or linking all sites to each other.

You also want to setup the domains under different Class C locations so they really do appear to be different sites linking back.

This borders on the line of BlackHat SEO or GreySEO as you are legitamately tricking a search engine into better rankings, but tricking none the less

It's done every day by many places, but personally I stay away from the dark side for most things