Links are hugely important in ranking well in the search engines, particularly Google. Links pointing to your website are like votes from other sites to yours. The more (quality) links you get the better your site will rank.
But so many people get this wrong, particularly when it comes to the actual text you put in the link.
When you place a link to your website on another site you need to make sure that the link contains the keywords that you're actually trying to rank for. If for example you have a website www.mywebsite.com and you want to rank for "Justin's website" then the link pointing to your site must have this as the link text. There's little value in just pointing to your site with the actual url as the link text, unless your url contains your keywords.
A great example of this is if you search in Google for "click here". The number one site is Adobe's Adobe Reader Download page. Now, on their page there is nothing about "click here". But so many people point to that page on Adobe's site by saying "Click here to download Adobe reader" with the "click here" part being the link to the Adobe page. So Google thinks that that Adobe page is about "click here".
This shows how important link text is. Links are hard to come by these days so when you get the chance get it right!
And, if you're stuck for keywords, use Google's excellent keyword tool to find them.
It makes all the difference.
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