Natural - I let other sites view my content and link to whatever they think is valuable. Haven't pursued directories, link exchanges, or paid links in almost a year.
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I'm still a newb at this one but I've done: Directory submission to around 400 directories, Sig links, Posting in relevant forums and sneaking links in, and a few link exchanges.
It depends of the sites, for example when you got a tool site, its fairly easy to get word of mouf if your tool works well. Word of mouf is the best converting promotion IMO.
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forum sigs
blog comments
social bookmarks (some of them)
article submissions
yahoo groups (only if the group is related and got a good rep)
and link exchanges
I tend to diversify my linkbuilding for more reach on my target audience as well. Its not just SEO benefits that I get out of them, but also targeted direct traffic