Jess you are spot on about relevance, as I alluded in my post. One of the biggest changes during the Jagger update on Google was the weight given to inbound links. Relevance is now a much bigger factor in the weight given to a link pointing to your site.
Just realised that I should make clear that not all links are equal, or ever really have been. There a re factors that alter the 'weight' (the benefit or value Google applies to a link) of a link. these are briefly, the page rank value of the linking page (for PR value), the volume of links on the page (again directly affecting PR transfer value), the perceived value of the anchor page (the page where the link comes from) and the anchor text of the page. It has also been thought by some (myself included) that the text immediately around the link is taken into account.
New elements appear to have been brought into the equation now though such as the semantic relevance between the anchor page, the target page and the link itself Links have always acted as a bridge between the two pages, as for ranking purposes the anchor text is viewed as being present on BOTH anchor and target pages. Now due to a better understanding of the value of anchor pages (possibly better semantics and possibly (as I believe) the introduction of a basic 'trustrank' element, it is now more than ever essential to get inbound links from on topic (relevant) pages, and from authority sites. If anyone doesn't know what authority and hub sites are please post and I will explain.
Maro also hit the nail on the head with the word 'traffic' this is the key to internet success above all else. If you have traffic then eventually you will get conversions. Even a blind pig in a field will eventually find the food if he walks about enough
