I dip my stick in both white and greyer areas. I find that the grey areas offer faster results and so I do it on sites which are easily dispensable. I know the feeling you describe, I try to as much as I can to avoid it ..but sometimes in order in compete (or for fast results) I just can't.

For longer term projects, white hat is definitely the way to go. Here's my suggestions for this. I posted some of this in another thread.

-Contact related sites, offer them content. Use Guest blogging services like MyBlogGuest, BloggerLinkUp. There's also Haro if you're an expert in your niche. Be picky about the sites you submit content to, I don't go for nothing with a domain authority under 40 or PR less than 3.

-Look for bloggers with just one adsense unit and a donate button. You know the type. These usually are passionate about their content and would probably accept a small donation to link to your related site.

-Look for resource lists related to your niche. If they're old and curated, they'll probably have broken links on them. Email the owner, point out the broken links and suggest new ones. Yours included.

-Looks at your competitors' backlink profiles. Buy/Acquire/Build/Trade to get the same links they have. But do it like you're making a mix CD, only the best tracks.

-Acquire related domains with PR. Make sites out of them separate from your own. The big authority sites do it all the time, why shouldn't you! If you like creating good content, it shouldn't be hard. With these sites, you can be less whitehat about the link building. I blast them to hell.

-Paid Directories still are good. Use the ones that are human edited and those without the guarantee of admission - such as YahooDir, BOTW, etc.

-Press Releases are still good. Prweb gives me the best results.

-And of course, create link worthy content that people freely reference. If sites like Newspapers, and eHow start linking to you, you know you're on the right track.

These methods are expensive and time-consuming, but the good thing about them is that you don't need thousands of links like these.

I doubt any site that has an desire to be in the top 100, much less the top 10, for keywords can do it without self-promotion. You'd have to have an extremely innovated idea and website to just tell your friends and they tell their friends, etc, etc to get the backlinks you need naturally.

What google needs to do is differentiate between spam backlinking to lower quality sites and moderate backlinking to quality sites. I don't think it's fair to punish good sites doing some self-promotion to get the word out. I know I spend over $700/month on adwords, but one of my sites is in a very competitive niche with competition that has been around for 10 years and over 1 million backlinks. Kinda tough to break into the top 10 based on the hope people will post a link for you it the right place with the right keywords enough times to make a difference.

This is just my outlook on it, so you can take it for what is worth. If you are worried that you are going to get caught, then you are doing things that you shouldn't and you already know it. I have no problem writing content and building links to my site. Whether I send the content out or not should not matter. It all comes down to the way that you are doing so. If doing so was bad, then Google itself could never offer a press release, since distributing it would be against their own TOS.

Link building itself is frowned upon because many times, the links are not worth much, or the content being sent out is spam. It is up to the person that is doing the work to make sure that they are doing so at a higher quality. As we have seen time and time again, the more you try to play games for quick results, the harder the fall you take in the long run.

You need to have your eyes open. Literally hundreds of thousands of people have been penalized for unnatural link building.

The future of building links is not as bright as it once was.

I suppose it all depends on your site & content.

I have download sites that get a lot of links built from my traffic.

You could create useful tools that traffic can add to their sites, sort of like addthis.com does, only add a backlink that Google will see (plain text). You'll have to be creative & get your traffic to help build links because they like what your site has to offer.

I'm sure a lot of folks around here don't like this idea of traffic building links, because it does take a long time. Still, you have options.