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Your page content lets Google and all SEs determine if your page is relevant to the query being submitted. But most queries are just a couple words, so amongst all of the pages out there SEs have to figure out which ones are the best.
Content is the first means of doing this: pages that mention the search term multiple times (amongst the larger context of the page, not just over and over), where terms are emphasized, as in the title, headings and bold text, where terms are in the same order as the query, how recently the page changed, and many, many other factors cause a page to get a good score. And pages that have links from other pages whose linked text contains matches to the query terms are also counted and provide even more weight.
Still, SEs still needs to figure out how to rank the possible matches when there are more than one that all score about the same, which is almost always. PR is another factor, which will certainly break a tie, and maybe a lot more.
It seems to me that a while back, PR was a hugely significant factor in determining placement -- Google feels that a page linked to by many other pages is more popular, and hence more likely to be a good choice, all other things being similar. High PR sites with less good content matches might do better.
But knowing this, many people start going out and getting links, right? "Organic" links from other great sites who just think your site is great would be the best (and are the ideal probably envisioned by Google), but they are often difficult to distinguish from links people buy. Or manufacture on other sites they own or manage. Or post on Blogs. Or scores of other ways to snooker the search engine.
So it seems that PR is less important than it might once have been because it is a less good indicator of true goodness. But I think now it is critically important to avoid the appearance of doing something sneaky. Whether you intend to do something sneaky is unimportant; if it looks that way, you could be in trouble. I speak from experience here; one of our sites recently was banned for doing something bad, it seems, although we have very little idea of what exactly it was :) It doesn't matter how many sites link to you if Google has decided that your site's pages are bad.
Content first, links second.