Page Rank is used to determine the popularity of a website. Links from a site to another can be seen as a vote. A link from a high PR site weights more than a link from a low PR site.
The Anatomy of a Search Engine
This is the original paper published by the google founders. It explains the idea behind Page Rank pretty well.
A higher Page Rank will definitely help you to rank better in the SERPs.
However, Page Rank is not everything
... and it is getting less important recently ...