301 redirect strategy

Hey guys, great forum you have here. I have a couple questions:

1) What's the best way to set up a domain that will 301 redirect to your money site? Should you buy an aged/expired domain and do link building to it?

2) Will 301 redirecting in from a site that has your primary keyword in the URL help you rank for the primary keyword on your money site?

Cheers,
Jeff

1) "There are some domain transfers ( e.g. genuine purchases of companies) where it can make perfect sense for links to transfer. But at the same time it wouldn’t make sense to transfer the links from an expired or effectively expired domain, for example. Google (and probably all search engines) tries to handle links appropriately for domain transfers." - Cutts

2) no

So I take it you don't use 301 redirects at all?

I'm trying to figure out what the big stink is about it all and whether I'm missing the boat here.

I got started on this wild goose hunt with 301's after doing some research on the top SEO dawg here in New Jersey. I checked out his site and saw many fewer, and lower quality links than to his main competitor:

Here's #1: (have to copy/paste since I'm a forum n00b)
bit.ly/d5xd1M

And I saw him post this on his site: "Find an older site that looks like it is owned by a small company or a webmaster who might be willing to sell you a site that is already established. You can then link back to your site from this newly acquired site, or just 301 redirect everything to your domain. The trust and link power do reduce slightly through a 301, but in my experience, it still passes a lot of linking power."

Here's #2:
bit.ly/cjEOGR

The question was: "Should you buy an aged/expired domain and do link building to it?"
The answer is no. when a domain changes hands, Google resets the links value to zero/near zero. Why would you build links to a domain with no authority that redirects to your site? Trying to be nice...

DO I use 301s? yes, often, properly.

Thanks KP. Is there a sticky on how best to use them?