Question about link exchange

I am running an ecommerce website. I received an email from another administrator offering exchange links. I've got a question regarding this:

That I noticed on his site that the page where he placed the links was not linked anywhere on his site (atleast not that I found) How effective is this?

You must first check that page's pagerank. If its more than yours then just go for it.

Check about his page rank. If he is getting more traffic and has high page rank then don't be late to link exchange :)