I should perhaps clear up a couple of misconceptions here... outbound links generally don't increase the value of your site, and reciprocal links aren't much better. What you want are one-way inbound links from high-ranking sites. You should also avoid simply adding hundreds of reciprocal links to your site as that doesn't help either - in fact if anything excessive linking could be seen as spam and even get you blacklisted!
It is correct however, that links to your site should be relevant. The more relevant sites linking to yours shows your site is important in that area. It's a little more complicated than that, but that's the general idea.
Don't be too hung up on PageRank - it's generally accepted the Google toolbar is way out of date, and there's growing speculation that PageRank is nothing like the force it used to be.
The usual advice applies - focus on providing good content, relevant and useful to your visitors, on a well-designed and properly coded site, with other relevant sites linking to you. Whatever you do don't use automated programs and any tricks - you'll regret it!
Anyone wanting to get the facts rather than fiction about search engines should spend some time on the following sites. There are lots of others but these would be a good start:
http://www.searchenginewatch.com
http://www.seochat.com
