Link text (the text that is clicked on when clicking on a link) is singly the most important factor when Google determines the rankings for any given searchterm. This article isn't about that aspect of inbound links, although it is briefly touched on. This article discusses inbound links for their link popularity/PageRank value, and provides ideas on how to acquire them.
Why do we need inbound links?
Even before Google came on the scene, link popularity (linkpop) was being used by one or two search engines as part of their algorithm when determining the rankings for any given searchterm. Then when Google arrived with their link-based PageRank, link popularity took off and became an absolute essential ingredient in achieving top rankings.
The idea behind linkpop is that the more pages that link to a page, the more important the page is and it, therefore, deserves a higher ranking than it would otherwise have.
Some engines simply counted the number of links coming into a page ( inbound links ), but Google took the idea a step further. Each inbound link comes comes from a page which itself has inbound links. The more inbound links on the linking page, the more important that page is and, therefore, the more important the link to our page is. So Google gives more weight to inbound links from important pages that it does to inbound links from lesser pages. They call the idea "PageRank".