Internal links: whatever. External links: trust.

@Ruud: Not strictly true. Internal linking is still hugely important to get juice flowing to pages on a site. Also a lot of trusted domains get pages ranking highly purely off the back of internal links alone and not an external backlink in sight.

But most of us dont deal with uber-trusted sites; for the rest of us, there does seem to be a 'switch' that needs to be pulled on inner pages for certain queries where the internal link juice isn't fully applied UNTIL there are also external links pointing to it.  I think that's the point of Eric's article.

When a domain has a page ranking w/o an external link to it, that page rank because external links are bestowing trust on the domain.That remains the essential value difference between link-votes; an external link can bestow "I trust" -- an internal link can't. Trust isn't self-referential.

That remains the essential value difference between link-votes; an external link can bestow "I trust" -- an internal link can't. Trust isn't self-referential.

Yup we basically agree here - internal links spread the power/trust gained by external links to pages on the site as a whole - part of the trust gained by external links to a homepage for example is in turn 'bestowed' to internally linked pages.