What Dazz means is checking the PR of incoming links. So when you ask an other site for a link to yours you only want to ask those that are aa) related to your topic and bb) have some PR (although I say that aa)-sites are more important to me. bb) will follow). For building your own link page (outbound links) you also should take care of not linking to bad sites (spammers, cloakers etc). Make sure that the link you provide on your page is helpful for your visitors and related (not competitve!) to your content/site-concept.
In addition to the G-Toolbar you could also try Alexa, where you get information about traffic, inbound links, related visits.