This seems too simple, and something that Google will eventually sniff out and penalize for? What if the blog site is on a completely different web host from the other sites?
It must be beneficial, as the hubpages article only has 3 total backlinks, 1 from their self-serving blog, 1 from ezinearticles, and 1 from a larger autoblog. It's not a very competitive keyword phrase, but it still got it to #1.
What is this called and does it work in the long haul?