Friend-of-the-blog Keith Adams recently asked that I do a post specifically about Back links and the benefits to SEO etc.,
As it happens, good blog-friend Jason D Moore has just posted an article that explains it all very succinctly.
Take a look at: SEO for Bloggers: Links on his site for more information.
Cheers
-km (listening to: Battleship Chains by The Georgia Satellites (yep, honestly))
Ta Kev