PageRank Explained

Every SEO that's worth their salt want to know how Google secret PageRank system works. However this is not the only factor in the results served

The Google toolbar
If you have the Google toolbar installed in your browser, you will be used to seeing each page's PageRank as you browse the web. But all isn't always as it seems. Many pages that Google displays the PageRank for haven't been indexed in Google and certainly don't have any PageRank in their own right. What is happening is that one or more pages on the site have been indexed and a PageRank has been calculated. The PageRank figure for the site's pages that haven't been indexed is allocated on the fly - just for your toolbar. The PageRank itself doesn't exist.

It's important to know this so that you can avoid exchanging links with pages that really don't have any PageRank of their own. Before making exchanges, search for the page on Google to make sure that it is indexed.

PageRank explained
In its most basic form Google measures how many pages or websites on the internet link in to yours. Also a large factor is how your websites internal linking structure works. You can lose valuable PR if your website architecture is not Google friendly or search engine robot friendly.

External websites with high PR give your PR a boost. External links from your site drain your PR.

Now we are going to get very technical. Further reading.

Phil Cravens Page Rank explained is the best we've found with a PR calculator. WOW