Google Page Rank (PR) Explained
Page rank relies on linking between sites. It is this linking between sites that makes the Internet what it is today. Google treats a link from one page to another as a vote, it is termed by Google as "a link from page A to page B as a vote, by page A, for page B ". This initially looks like quite an inferior method, so why don't you just get lots of links so that your site can rank highly!
Well that used to be the case until Google enhanced or updated the PR model to look at the relevance of links and determine the weight of the link by the strength and relevance of the site the link is coming from.
"Important, high-quality sites receive a higher PageRank, which Google remembers each time it conducts a search"
This is very important to remember. This should teach you to be careful with your links and only link to and from relevant sites, helping to make the web less spammy.
So Google looks at all of the links to your site and determine your PR. To throw a spanner in the works, your site can also lose PR by linking to other sites. Basically when you link to an external site you give them a little bit of your PR. This is not dramatic though so you should not worry too much about it and there are ways of getting around this such as using JavaScript to direct the link.
How is PR measured?
Google PR is measured from 0 - 10 out of 10, Where 0/10 is the lowest and 10/10 is the highest. There is no available definitive data about the actual level of PR but it is widely accepted that PR is not linear. a PR0 or PR1 is very easy to get where as anything above a PR4 is harder to get. PR10s are almost un-heard of. The scale is more like a logarithmic scale where the PR gets exponentially more important the higher it goes, remember though this is not the be all and end all of ranking highly in Google.
"Google combines PageRank with sophisticated text-matching techniques to find pages that are both important and relevant to your search. Google goes far beyond the number of times a term appears on a page and examines all aspects of the page's content (and the content of the pages linking to it) to determine if it's a good match for your query."
The Nature of PR
The very nature of PR hails back to the early days of the web when links from html documents to other html documents was advanced! PR builds on the "family tree" nature of links on the web. If you link to other relevant sites and they link to you it builds up tree of links relevant to a particular subject.
Conclusion
In conclusion PR is still an important part of SEO and ranking in Google. It should be a consideration of any web marketing policy but it should not be your priority over good content and relevance. Google uses PR to provide much more relevant SERPs than other search engines, this is why Google is still the #1 search engine.