Robert_Charlton - 10:57 pm on Apr 5, 2012 (gmt 0)
The value of external links is distributed from each entry point - and no site of any size has external links to every page.
This is a key point and is worth emphasizing. The nature of the site affects what those entry points are likely to be. The contextual linking that you see in Wikipedia or the New York Times, eg, works only because the articles that link out contextually are themselves entry points. They attract external links and thus have incoming link juice to redistribute.
One needs to be careful not to redistribute the link juice indiscriminately. In a large site, prioritization is essential. A large site generally needs multiple entry points and multiple types of prioritization to reach all important pages, and navigation should consider where the link juice is flowing from each entry point.
On sites where the home page is the most natural entry point, top down prioritization is a core structural consideration. In a top-down hierarchical structure, the trick is to make the site neither too flat nor too narrow. Too many deep links to individual pages or subcategories from home can often siphon off the link juice better left for major categories. Such a structure also makes prioritization impossible. In my minds eye, a well-designed navigation structure looks like an inverted tree, or a group of related inverted trees, with the link juice flowing along branches that get thinner as they "branch out" from the "root". You don't want to send too much or too little link juice to any one page.
All too often, I see smaller ecommerce sites randomly linking to a large number of product pages or subcategories from home, without consideration of how that juice is being distributed and of how much juice is needed for ranking. Considering (for discussion purposes) top-down linking only... what becomes a very difficult balancing act is that, in a hierarchical structure, the more link emphasis you provide directly from home (or from higher levels) to individual pages or categories, the less link juice you have left over for all the rest of your nav structure. If you have too many links from home, or from any entry page, you will in effect need to link to everything from home, and on a large site that simply doesn't scale.