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Do these internal links then count towards the main pages PR?
It seems as though that once a site hits a PR5 a virtuous cycle is created.
Sites don't have a tollbar PR 5. Pages do.
All pages pass a portion of their PR to the other pages they link to. In your example, (assuming that there are no external links pointing to the interior pages) the interior pages are only giving back PR that they initially received from the home page.
Except apparently if you have your content spread over a number of sites you can get a PR0 for crosslinking to them while if all your links are internal then you are rewarded.
It's better to put all your content into one big, well structured site and 'crosslink' the pages than split the content amongst various domains - that way you give links to all your pages and don't risk a crosslinking penalty.
So if your home page has PR5, link to no more than 50 internal pages from it and crosslink these pages, which should all receive PR4.
Then each internal page will have 49 PR4 backlinks (the other internal pages) and one PR5 backlink (from the home page).
And you get the added bonus of being able to decide what the anchor text is in each of these links too, thus further optimizing these pages for SERPS :)
Links below PR4 pass PageRank too, so the virtuous cycle happens whenever you set up a feedback loop.
This isn't as exciting as it sounds though. The normalisation and 'rank source' at each PageRank iteration act as a PR decay with each iteration; combined with a steep logarithmic curve for PageRank this causes the affect of the feedback loop to be fairly small (much less than one notch on the Toolbar). External links do such PageRank, but not as much (on the Toolbar scale) as we might think.
I agree with the comments about PR being transferred just as well within a domain, but the link text weight is higher if the link is from another domain. Perhaps this is why Google care about cross-linking domains?