John, I agree that most of those sites which I have seen which are successful in operating groups of networked sites understand that it is not an excersise which cannot be undertaken without planning. I have seen such groups which use:
Fake owner names and addresses in the domian registration files
Hosting on different servers with unique IP addressess for all sites.
Different email addresses for different sites.
Do a Google search for engagement rings and take a look at the top ranked site for that term and in particular the secondary links at the bottom of the page which link to the other sites in the group.
Then take a look at the back links to that page and you will see that Google is crediting multiple links from all the sites in the group, plus links from the owners main site (which has been carefully left out of the group of links at the bottom of the page).
The links to this site from the pages of the other sites in the group are using the anchor text "engagement rings", a term that this site has achieved a #1 Google ranking for.
If you want to really research this you will find that a whois will reveal that all the sites are registered to different owners, but that many of the owners seem to have the same email address, and that the addressess are all within a 15 mile radius of a small town in Louisiana, and they all sell the same or similar products.
This is someone who knows how to make this system work.
You might also notice that all 14 of the sites in the link group have a batch of hidden text by way of a
[code:1:872d84b446]<DIV id=optimization
style="Z-INDEX: 500; LEFT: -231px; VISIBILITY: visible; WIDTH: 200px; POSITION: absolute; TOP: -130px; HEIGHT: 115px">[/code:1:872d84b446] though in this case I wonder why they have bothered as the hidden text is relevant to the page and site and would look fine visible.