I always wondered about this. What exactly is a backlink, and why should I need one?
Some other website linking to your website. The general premise is that if other sites with some known reputation are linking to you, you have a bit more credibility than a completely isolated site that nobody else references.
Backlinks are links to your website used by algorithms like PageRank^1 to weight how important your site is. Roughly speaking, more links, especially from sites with their own high pagerank = higher rank.