The myth the question addressed was whether "having incoming low-rated links, or links that are not rated, will reduce your own site's page ranking."
That is untrue.
Let's make one thing abundantly clear.
Incoming links help!
Incoming links help your site's rankings in the search engines like Google(from searches for your main search terms and keywords).
Incoming links help your site's PageRank (PR) (the measure of your blog's importance based on the number and quality of incoming links) regardless of the incoming link's PR value.
I think what the myth has confused, is Google only shows on your backlinks report, PageRank 4 (PR4) or higher links. That report is only a sampling too, and doesn't include all of the links to your blog either.
Google takes into account all incoming links it collects as its spiders (search engine computer robots that travel the internet indexing websites) crawl your blogs. While a PR2 site (a low PageRank site) may not pass along as much PageRank as a higher, say PR6 site, they all are included in the calculation of PageRank.
Sites with more incoming links, tend to be placed much higher in the search results for your keywords, than those sites lacking many backlinks. The more links the better.
Links add to your blog's search rankings and PageRank.
Links do not subtract.
Don't hesitate to trade links with a site that has a "low" PageRank. That PR can increase over time as that blog adds incoming links.
The only links that can harm your blog are from Google penalized sites (including some "link farms" and "free for all (FFA)" sites.) You are not penalized if they link to your blog, however.
Google understands that you have no control over who links to your blog. You are only hurt if you link back to them, as Google believes you have control over what links you place on your own blog. Avoid those, and you have nothing to worry about!
In summary, incoming links are good for your blog.
Don't listen to those people who say otherwise.
They are only repeating myths.
