Now that you've learned how building up inbound links to your web page from external websites is probably the single-most important element in SEO, you're embarking on a campaign to foster inbound links to your site. But how do you decide what links to go after and how to prioritize across various opportunities?
As a general rule of thumb, you want to have as many links from a diverse set of the most reputable sites possible.
First let's take quantity versus quality. You can think of the PageRank algorithm as a summation of all the links you receive, weighted by their authority. So, for example, if you receive 5 different links from 5 different sites with "authorities" 2, 3, 7, 7, and 9, you could say that the total "authority" gained by your site is 2+3+6+7+7, or 25. On the other hand, if you received 3 different links from 3 different sites with authorities 9, 9, and 9, you would have received 9+9+9, or 27 "authority points." In our example, you would have been better off with fewer, but higher quality, links.
That tradeoff between link quantity and link quality should be fairly clear. Of course, keep in mind that obtaining a link from a more authoritative site is oftentimes more difficult, and thus may require more time and effort on your part to obtain.
The third variable I'll throw in here is the issue of link diversity. Let's take the example above with the 3 links. In a situation where all 3 links are from the same single site (from different pages or from different parts of the same page) versus where each of the 3 links comes from a different site, the option where the links come from more diverse sites is better and thus likely to rank your site higher.
It's even said that search engines may grade sites as being more or less diverse from each other based on past link patterns and other factors. Thus, there are also varying grades of "diversity." Make sure to keep in mind link diversity when building your inbound link profile as it's yet another factor that engines look at which you should take into account!