I think there's a thin line between reference and plagiarism. Like someone said, if you're trying to pass it off as your own, then it's not good. If you're clearly making a reference (or your character is), then it's okay, but you need to make sure your readers know it's a reference (or hint at the reference).
Eco references other authors extensivley, as a Semiotician it's what he has spent his entire life doing. Often the references are very obscure, so much so that 'naive' readers (his words, not mine) won't get them. He cites the opening lines of
The Name of the Rose as an example:
In the beginning there was the word and the word was with God and the word was God
Now, that's a fairly obvious reference to the Gospel of John. However, apparently lots of Japanese readers didn't understand the reference, and just assumed it was the main character's pious thoughts befitting a monk nearing the end of his life.
Another good example is in
Foucalt's Pendulum when the main character is standing underneath the Eiffel Tower, and imagines he's under the feet of some horrible metal monster. Much of his thoughts are in fact a collage of various writings by architectural critics at the time of the towers construction (where nearly all the feedback was very negative). 'Naive' readers will see Casaubon's reaction of fear and hullcination manifested by the tower, those clued up with turn of the century Parisian architecture will have a strange feeling of deja vu.
But of course references are even more complicated than this. One can be influenced in 3 ways. In this case, imagine that the original source of the reference is A and the author is B.
1. A and B are contemporaries, and both influence each other to limiting degrees. An example pulled straight out of the air would be The Wu Tang Clan and NWA. Both influenced each other, no matter how viruently both sides deny it.
2. A is in the past, so B's relation with it is only one way. For example, Tolkein was very much influenced by Beowulf, but Beowulf can't be said to be influenced by Tolkein.
3. This is the real one. We have to add another value, X. X represents culture. Lets take the example of Souljah Boy and NWA. Normally Hip Hop wouldn't be the ideal example here, but Souljah Boy prides himself in only having listened to 50 Cent so the example works.
NWA have added a large amount to "culture". Phrases such as "Fuck the police", "You are now about to witness the strength of street knowledge" and, of course "Straight outta Compton crazy nigger called Ice Cube". Souljah Boy uses these tropes now, but with no realisation that he is in fact referencing NWA. There's also the link between Dr Dre --> 50 Cent --> Souljah Boy.
Example: In looking back over one of my stories I see huge amounts of
If This is a Man and
The Purgatorio, despite having never read either at the time. Ideas like Purgatory, or tatooed arms enter into the mainstream.
