Link popularity and link quality are very important because every major search engine now considers them as a part of their ranking algorithms. If you don't have links, you won't rank well for competitive keywords.
Link popularity consists of:

> Number of links
> Quality of links
> Number of times people click on links to your site
> How long end users visit your site
> How often people return to your site

In other words, do your site visitors:
> Continue navigating your site?
> Link to your site?
> Bookmark your site?
> Return to your site?

Factors That Affect Popularity
> Substantial and unique content
> How other sites are linked to your site (anchor text)
> Site usability

Link Development Tactics
> Choose quality over quantity. Link quality carries more weight than quantity. Spend time getting the highest quality links pointing to your site.
> Begin with Web directories. Yahoo Directory and DMOZ are two reliable places for high-quality links.
> Harness online publicity. How-to tips, helpful articles, even press releases often attract links from other websites. The search engine optimization world calls this "link bait."
> Use blogs and forums wisely. Blogs and forums can call attention to useful information on your site.
> Use search engines to research link development. Look at competitors' sites to determine their link development strategy. It can help you with your own. What newspapers and media outlets do they use for online publicity? What Web directories link to their sites? No link popularity checker ("link: domain.com" in Google, "linkdomain: domain.com" in Yahoo) can substitute for doing the research yourself.