Link wheels can be effective tools but they need to be done right. You need to ensure that each link is sitting on a seperate C-Block to be the most effective (same C-Block will work just not as well) and the content needs to be quality content relevant to your main website. Throwing up multiple websites with garbage content will only hurt you.
I guess, it would haelp if you would visualize it by writing it first on paper. Be intentional. Each spoke of your wheel should have a purpose, an intended goal. This is not like hitting a pinata. What is it that you are after? More traffic? Crecibility? Authority? Deliberately map out in black and white how you would go about to create a web of links that would send you in the direction of the accomplishment of your goa. THEN, put it to practice online.
A great practical example of a legit link wheel......you start a reseller company, business is good but you want a bit more incoming revenue to pay bills, so you create a web design business but keep them both seperate. You quickly link the two together.
A year goes by and both companies are doing well but you decide with the demand of seo by your various clients to create a marketing company, you then link all three. Some more time goes by and you want to create a server blog, you reference the design company and the web hosting company and your friend's development company. Some more time goes by and you buy out your friend and host all web apps through your hosting company, pretty soon you have 5 legit websites all linking to the main hosting company. Because you contextualize the links and all the sites have quality relevant content, the link wheel will prove to be very effective especially if they are all on different c-blocks.
It is far more important to focus on creating unique and compelling content that provides value to your target market than manipulating SEO (not just black hat, but old hat).
Create good quality content not just on your websites, but also through your social networking channels. Social networking will also provide an alternative to SEO and the next algorithm changes by Google and other search engines.