PR, or Google Pagerank, is a very rough estimation of how important google feels a webpage is. Note I said web page and not web site. In other words, each page of a site has its own PR. Generally the higher the PR of a page, the more google will spider links off of that page (the deeper it will crawl) and the more often it will spider the page.
In any case, PR is calculated into google's ranking alogorithm (not as much as it used to be, though) and is therefore a factor in how well your site ranks in the search engines. Note that a high PR itself doesn't guarantee higher placement - it is just a rough estimate that most likely your site will be crawled deeper and spidered more by google.
The way that google figures it, if a lot of different pages from all around the Internet all link to a particular webpage, that page must be pretty important or have pretty good content. Therefore, PR of a page is calculated based on how many other pages from different websites all link to that page. When a site links to your page, it's called a backlink. i.e. when someone says that they have 50 backlinks, it means that 50 pages have linked to their page.
In any case, not all backlinks carry the same weight. If you get linked from a page with a high PR that google considers important, it carries much more weight than if you got linked from a page with a low PR. It could actually take thousands of backlinks from low PR pages to carry as much weight as 2 or 3 links from high PR pages. PageRank ranges anywhere from 0 to 10, with 10 being the absolute best. A PR of 4 or below is usually very easily achieved. PR5 takes a bit of work. PR6 even more so. PR7 and 8 take lots of work to achieve. PR9 and PR10 are usually only achieved by very, very big sites (i.e. corporate sites).
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