I get posed this question often, so I figure now is as good of time as any to discuss it once more. The question is this: "Can I build up links to my site too quickly because I have heard that Google will penalize me for doing so"?
More than likely (doing link building on your own) you will never run into the problem of "coming on too strong for Google". Let me help you understand what (I feel) is what people do that would be considered "wrong". First, avoid anything that resembles a link farm, or massive link building campaigns that will overnight give you 100k (plus) links. That could raise some red flags on the Googlebot.
Second, do the link building in a search engine friendly fashion; for example - If you are implementing a link building campaign by use of directories, articles, press releases, blogging and other community websites and tagging type sites then you really will not be doing anything out of the normal. Some may try to tell you to only submit to 50 or so directories a day, but you can submit to as many as you possibly can and not be coming on too strong. Think about it. You may submit to 50, but how many are actually going to approve you right away? Maybe half if you are lucky. So, let's say in a week you submit to over 600 directories, you will probably not get more then 100 actually accept you that first week. As time goes on every week you will see more approving you, and your link building campaign is gradually coming on (not to strong) by doing it this way.
It's the same with articles and press. You may submit a press release but how many media sites are actually going to be picking you up?
Slow and steady will win the linking game race (well it's not actually a race), but remember its just not about the amount of links pointing to your site. It's the method, site they are on (PR, .gov, .edu???), and the anchor text used to link to you.
I think if you avoid any kind of link building that gives you hundreds of thousands of links overnight then you are ok. $pam in any form is bad on Google, and this would be (in my opinion) a form of it!