I'm a little confused... I've posted messages and gotten the response that backlinking is definitely good because it raises your PR. Now I'm reading that the concensus seems to be that PR doesn't matter anyways.

Can someone please explain this?

Backlinks are good, Backlinks cause PR.
But PR is not important because it doesn't take into account the two main contributing factors of backlinks which will increase your serps, Which are anchor text and if the site linking to you has related content..

If you have a site about cats you could get a PR7 quite easily by getting links from high PR sites about plumbing and using the anchor text "gear boxes", But that wouldnt help your serps because the sites linking to you have nothing to do with your content, and neither does the anchor text used in those links.

Okay... So I have a mortgage broker website... This is what I have done some linking with:

<a href="http://www.moneytime.ca">Canadian Mortgage Brokers - </a>Canadian mortgage brokers highly specialized in residential and commercial lending. Purchases, pre-approvals, renewals, switches/transfers, cash back, refinance, debt consolidation, bad credit, self employed.

Would that help me, or do I need to put the WHOLE thing in the <a></a> tags???

What you have for the link is fine. Assuming the link itself ends up on a site that is not considered to be in a 'bad neghborhood' ie. a site that's been banned or practices spammy seo, then the link itself will help. The more trust and respect the search engines place on that site and the more relevant the site is to yours the better it will be. Also the longer that link stays online the better (for Google at least)

The text you have inside the <a></a> is called your anchor text. Anchor text is used a lot to determine what the page the link takes you to is about. In your case it will help that page get found for terms that use the keywords 'Canadian Mortgage Brokers' You generally don't want all your links to have the same anchor text though. That could be seen as overoptimization.

With PR you want to remember that it's a Google only thing. While Yahoo and MSN undoubtedly have something similar they don't use PR and PR has no meaning in those engines. When Google first came on the scene PR was the big thing. However for those that know how it's easy to manipulate and so became a less useful means for ranking a web page.

PR is still used by Google when determining rank, but it's weight in the algorith is decreasing. The PR you see in the toolbar though isn't the PR Google is using. They use a real PR behind the scenes that isn't based on 0-10. So what you see in the toolbar is kind of meaningless. It can be used as a quick measure about a site. Chances are a PR7 site has more and better links pointing to it than a PR4 site, but it doesn't have to and the PRs aren't an indication of where the two sites will rank for a given keyword phrase.

What stOx was saying is that PR comes from getting backlinks for your site. So does where your pages rank. Both PR and ranking are the effect of building backlinks. But ranking is not a result of PR and PR is not the cause or reason why a page might rank well.

Backlinks are good. But PR shouldn't be why you want a link on a site. There are other more important factors than PR.

My PR4 site dropped to 3 and all my pages that have 3 went to 0.