trakkerguy - 9:10 pm on Jun 14, 2007 (gmt 0)

The heirarchy does not take subject relevance, and several other factors into account.

It does seem to make some assessment of the strength of the page/site link is coming from. It also seems to factor in the number of outgoing links on the page. So a weak page, with very few outgoing, can be higher on the list than links from a stronger site with hundreds of outgoing.