are you talking about google wonder wheel?

Found this just now explaining Link Wheels.

Nothing new Its simply a tool for creating many links........

Standard SEO which should be done by all. You'll notice that the links go b->A c->A d->A, but site A does not link back. Linking back raises red flags on SEO. Also, be careful creating a bunch of new sites and linking to a site, or getting many new links overnight.

A NEW site linking to a site will not help with PageRank, but does help toward a little bit of exposure. Google won't put much weight on it until the domain/site is established and has clout or rank to share with others. It's an UNTRUSED source until that point.

So it is similar to link exchange between more people, yes?

Very similar. The root of the issue being that you don't actaully use OTHERS for the links, but rather setup multiple sites of your own, and then link each to each other - giving all rank.

And this helps in rankings?
How much important is this? Can it be done in established websites?

This can be done with ANY website - often NEW sites see the biggest boost, but any website can benefit. It's not different than the hundreds or thousands of websites that link back to various hosting companies. The more links, the more weight search engines give to the receiving website as being a valuable source.

You want to be sure that if you're linking to a hosting company, that you link from sites that deal with the same industry. You wouldn't want to link a baby nursery to a manufacturing company - less weight involved.

A place that sells leather belts would benefit if a place that sold leather wallets linked to them.

There are a lot of people that you can outsource to that build this up for you as well. We get a lot of people asking us about this and if it's acceptable and it seems like it is and shouldn't hurt your ranking. It may just do more for some sites than others, just trying to find big sites with great ranks to link to each other and back to your site.

Just to clarify - a link wheel, and the most bang for your buck, will be ONE WAY LINKS - not reciprocal.

You want to find others that will link to you, and you don't have to return the link. One way FOLLOW links to your site will boost your ranking.