Danny has written a great overview of PageRank.
Too much reading?
Here’s a nice summary in terms of SEO link building strategy:
“If you really want to know what are the most important, relevant pages to get links from, forget PageRank. Think search rank. Search for the words you’d like to rank for. See what pages come up tops in Google. Those are the most important and relevant pages you want to seek links from. That’s because Google is explicitly telling you that on the topic you searched for, these are the best“