Link building is still important for building website authority but make sure you do it right.

A few definitions for the uninitiated:

• (Bad) Black hat linking refers to the process of acquiring as many links as possible with minimal effort. Black hat SEO could also be referred to as Spamdexing as this also includes a lot of black SEO strategies and link building tactics. Some black hat link building strategies include getting unqualified links from and participating in link farms, private blog networks, and other unscrupulous link building schemes.
• (Good) White hat link building strategies are those strategies that add value to end users, abide by Google’s term of service and produce good results that could be sustained for a long time. White hat link building strategies focus on producing high-quality as well as relevant links to the website. Although more difficult to acquire, white hat link building tactics are widely implemented by website owners as such strategies are not only beneficial to their websites’ long-term developments but also good to the overall online environment.

And an uber relevant quote…

The philosophy that we’ve always had is if you make something that’s compelling then it would be much easier to get people to write about it and to link to it. And so a lot of people approach it from a direction that’s backwards. They try to get the links first and then they want to be grandfathered in or think they will be a successful website as a result.  Their goal should really be to make a fantastic website that people love and tell their friends about and link to and want to experience. As a result, your website starts to become stronger and stronger in the rankings.     – Matt Cutts (humanoid google-bot cyborg)

Another take on link building as interpreted by another google noodle:

In general, I’d try to avoid that (link building).  So that you are really sure that your content kind of stands on its own and make it possible for other people of course to link to your content. …maybe, put a widget on your page, if you like this, this is how you can link to it. Make sure that the URLs on your web site are easy to copy and paste. All of those things make it a little bit easier.  We do use links as part of our algorithm but we use lots and lots of other factors as well. So only focusing on links is probably going to cause more problems for your web site than actually helps.     – John Mueller (Google Webmaster Trends Analyst)

So what does all that mean?  I think it’s fairly clear after looking at the language used by both of these two top experts that link building is still a valuable component of sound SEO and overall website authority building strategies.   Their feedback also suggests, however, and anecdotal evidence indicates that unfortunately many of the black hat or gray hat techniques still out there are somewhat effective which is why those efforts haven’t died out completely.   Google’s algorithms will continue to improve however you can bet on that.  So over time they will be able to more easily discern between unscrupulous link building efforts and purely white hat techniques.  So if i were you I would focus purely on google sanctioned type efforts.

Here’s a few simple techniques that can work and are easy:

• Providing legitimate meaningful feedback on authoritative blog posts and include your site URL (use correctly and sparingly as google has mentioned this is on their radar, see below…)

As long as you aren’t actively using blog comments as a way to increase your backlink profile significantly, you are posting on topically relevant blogs, and you aren’t using a spammy keyword heavy name, but are using your real name instead, you should be fine and not get penalized.     – Matt Cutts

• Emailing website editors and requesting a link to your site be included in relevant content (relatively easy and works often unless your site is useless)
• Create visually appealing rich info-graphics, or other useful tools that people want to link to
• Having an industry leading respectable web presence that people feel confident in promoting and linking to

What not to do:

• Don’t use private blog networks, link farms, doorway pages, etc
• Don’t spam your links all over the web you will end up getting nowhere and lose credibility
• Don’t buy or sell links that pass PageRank. This includes exchanging money for links, or posts that contain links; exchanging goods or services for links; or sending someone a “free” product in exchange for them writing about it and including a link
• Don’t request link exchanges (“Link to me and i’ll link to you”) or partner pages exclusively for the sake of cross-linking
• Don’t use large-scale article marketing or guest posting campaigns with keyword-rich anchor text link
• Don’t use automated programs or services to create links to your site
• Don’t use low-quality directory or bookmark site links

So in short, YES link build away but try to do it the right way.  Also I wouldn’t necessarily lose too much sleep over a poorly constructed link portfolio either. It’s far more important to focus on having a website that provides content or services that people actually need/want to consume and web traffic will find you regardless.