Inbound linking is a link to your site which doesn't have a reciprocal link back from you - i.e an independent vote for your site. However many people myself included get 100's of requests for either three-way or triangular linking as they like to call it, where you give an independent vote (link) to a site that may be of reasonable quality but the requestor is giving you back an inbound link from some rubbish directory or unrelated site in outer mongolia.
I refuse all 3 way linking requests, I've yet to see one that was of any value to either my business or my customers.
Linking to good quality, relevant, good link neighbourhood (i.e those you link to haven't linked to every site known to man relevant or not) reciprocal links do have substance, not least of which is the fact that the customer will quite often look at links and follow them through looking for similar themed good quality to the one they visited (of course if your site is rubbish then they may just hop off too

).
I get 25% of my business through inbound links from articles I have written, press releases, forum posting, social networking etc and from referrals via forums and via links I have swapped with similar themed sites.
Links should be considered from the point of view of whether or not they add value and contribute to the quality of your site - in otherwords viewed from the customers perspective, if you think a site is dire, don't link with it, if you stick to that principle and link to those then the value will be seen.
And ignore Page Rank (PR), it's not relevant, PR fluctuates wildly and bears no reflection on how good, bad or indifferent a site it...it's mostly just an American obsession in the SEO stakes. If it was at all important then the really awful spammy directory sites, littered with links to the vulgar and obscene would have a PR of zero - take it with a very, very, heart attack inducing pinch of salt!