Etiquette of Blogroll Reciprocity

How do you decide who to add to your Blogroll?
What are your rules of engagement for reciprocal Blogroll etiquette?
I used to link here anyone who linked me even if they didn’t request a link. It seemed like the appropriate thing to do as a new member of the blogging community.
As some blogs become more popular and more links are forged — is one still responsible on a moral plane to continue to reciprocate Blogroll links with anyone who chooses to link their blog?
I understand some blogs are cruel or tasteless and one would never want to exchange links — but what if a blog is “just okay” or “merely passable” or “contentedly well-intended” — does it still require a link back or do only blogs with magnitude deserve your Blogroll?