http://www.google.com/support/webmasters is a very important site to go and visit if you want to hear it all straight from the horses mouth.

A quote from a linked page within the site explains the PageRank a bit better…

“Important, high-quality sites receive a higher PageRank, which Google remembers each time it conducts a search. Of course, important pages mean nothing to you if they don’t match your query. So, Google combines PageRank with sophisticated text-matching techniques to find pages that are both important and relevant to your search. Google goes far beyond the number of times a term appears on a page and examines all aspects of the page’s content (and the content of the pages linking to it) to determine if it’s a good match for your query”.
http://www.google.com/technology/index.html

So explore what Google has to say as you build your site.