How does adding links to your site improve it google rating?

because google spiders go and visit a website and when they see your link on that website the spiders will came and visit your website too.. its kind of reputation :) for more check out source box :)

It probably doesn't. Let's assume that Google is trying to find the best sites for the people searching. If someone arrives on your site from a Google search, looks at a few pages and then exits via one of your links and then finds something additionally useful to what he found on your site, then you could assume that Google would take that as a positive point for your site. But in the main, does this happen? Probably not, especially if you have bought links or swapped links willy-nilly. This will make your site less attractive and Google will mark you down, or even penalise you, accordingly. It is just a question of common sense really.

if you advertise on a site like http://advertis.co.uk which has a page rank of 7, and you can advertise for free by the way, your site would go up by a portion of that, and if there are no other sites within your search criteria with a higher page rank, you will be first.

links help because they allow site visitors direct access to different websites around the internet. The google search robots ( spiders) then crawl your site and follow all the links to and fro from each site. The more links the more related content to your website meaning your site holds lots of information all in one place. Also the more links in and out get indexed so you have more links added to the google search results. For instance if you had just a homepage and no pages then the website would only have that one page indexed meaning 1 search result. Have 500 pages / links then thats 500 results in the google search results. The more links means more people find your website, the more people that find the site make it a more poular site and will then increase your search results and page ranking.