Matt Cutts answered this in a video from over a month ago, where he said:
Typically, internal website links will not cause you any sort of trouble. Now, the reason why I say ‘typically not’ rather than a hard ‘no’ is just because as soon as I say a hard ‘no’ there will be someone who has like five thousand links – all with the exact same anchor text on one page. But if you have a normal site, you know…a catalog site or whatever…. you’ve got breadcrumbs…you’ve got a normal template there…that’s just the way that people find their way around the site, and navigate, you should be totally fine.
Here is the video:
WebmasterWorld's administrator said, "Yes, this doesn't match up with my experience - especially overly repeated keywords in internal anchor text. Maybe something has changed?"
I think it goes as Matt said. It depends on how aggressive you are with your internal links. If it is typical navigation and footer links but not keyword stuffed beyond your imagination, then you are fine. If it is so aggressive, then it may lead to an issue.
Forum discussion at WebmasterWorld.
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