PR is basically a measure of how many sites are linking to you. That's it. However, it isn't quite as simple as you might think. PR is a measure out of ten, i.e.: 1/10, 5/10, 10/10. The greater the number of sites linking to you, the higher you PR would be.
PR is therefore a way of measuring your sites popularity. This is very important for the search engine spiders and for you when looking at your competition.
The PR of the sites linking to you is also very important. It is much better to have a PR6 site link to you than a PR3 site. And it is even better if you have a PR8 site link to you than a PR6 site - I'm sure you get the picture now. A site with a PR6 or 7 is worth dozens of PR2 sites linking to you.
The SE's will pick up the PR of the sites linking to you and reward you accordingly. Do you ever wonder why the top position in the SE's could have 200 backlinks but the No3 position could have 500 but the site with fewer backlinks ranks better? Well one most likely reason is that the links are of a higher quality - in other words, a higher PR.
When starting an SEO campaign it is always wise to check out your competition in terms of who is linking to them? The PR of sites linking to them? The relevancy of the sites linking to them? Etc etc etc.
If their linking partners have great PR's then you can simply copy them. Contact these sites and ask for a simple link exchange. If some of your competitors link partners have low to zero PR then you can beat them by finding higher PR sites and requesting link exchanges. This way you could end up ranking higher than your competition with fewer backlinks.
You can view the PR of any site by downloading the Google Toolbar. This is free to download and gives you the PR of any site at a quick glance.
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