@Medha - There are two types of links - Do-follow and No-follow. Normal links which we give using the horizantal eight symbol are do follow links. Actually, when you link another blog/web-page some credibility is passed on to it. The number/quality of links help the web-page to rank better with search engines. But no-follow links do not pass such credibility. The link is still there, but the linked-site does not get any benefit. Actually a small hack in the link code can gererate a no-follow link. If you are using Blogger, you can directly do it from the link interface.
@Nandita - I don't think links from the comments are given much importance by search engines. So, comment luv plugin should not create a problem. I have been using the free version for a long time without any major issues.