PageRank™, usually simply called page rank, or PR, is a technique that Google uses to evaluate the importance of an individual web page.
In simple terms, the PageRank value is the result of the number and quality of inbound links.
The underlying method was developed by Stanford University and Larry Page from Google. PageRank remains Google's proprietary method of page ranking. While PageRank is important, many other factors also influence a page's position in a search engine result page (SERP).
Wikipedia's entry about PageRank and Google's explanation are well worth reading.
