April, I'm guessing with that many pages that you're site is database driven. Since your product pages have a PR0, they are probably not being crawled. This might be due to long URL's which use special characters such as?=& etc. Also, it may be due to your product pages being more than 3 levels deep. Perhaps you might be better off using subdomains. Your sitemap could then list all your subdomains. Each subdomain (category) could have it's own site map (product listing).
Does google give pages a lower PR if it has to dig deeper within a site for the page?
Typically, yes. But if other websites link to one of your internal pages, that page could in fact have a higher PR than your index.