How Google Ranks Your Web Page

Link Popularity: Google's version of this is called PageRank. Very simply put, the idea is that site A votes for site B by placing a link to site B on site A. Despite popular belief, simply exchanging links with a whole bunch of sites isn't necessarily going to increase your PageRank. The Google search engine analyzes the importance of the sites providing the links to your site. Focus on receiving links from sites with good rankings and that are related to your website.

Download the Google Toolbar to check your PageRank and the PageRank of sites you link with: Be weary of linking with sites a PageRank of 0 ~ perhaps, they are new to the Internet, but they may also be a banned site. You don't want to associate yourself with sites that have been banned.

You can see that Google does not index all the links to your site. Find out which links Google indexes by searching for your site "http://www.yourdomain.com" on Google. Then below your link, you'll see the option "Find web pages that link to http://www.yourdomain.com". There you'll find the pages that Google has found that link to your site. You'll notice that many of these links may be your own pages. Be sure to link all your pages together as this can help increase link popularity.

Or just enter:

link:yourdomain.com in to the search box

Link popularity is calculated on all the pages in your web site. You should generate links to all your important pages, not just your home page.

Incoming Link Text & Link Popularity: When building incoming links to your website, always use your keywords. Be sure to tell your link partners and others who want to link to you, to use the keywords you have chosen.

For example:

Good link: Work at Home Moms - Internet Marketing

Not such a good link: http://www.internetbasedmoms.com or InternetBasedMoms.com

(if the words in your domain name are important, be sure to separate the words - ex. Internet Based Moms, instead of InternetBasedMoms.com)

Search engines read the text in your link and this may help your rankings for those keywords. The idea is if people are linking to you with those words in their link, then they must be relevant to your site.

Meta Tags: Google considers your Title tag when indexing your page. It considers your Description Meta Tags to some extent and sometimes uses them in search results, but does not consider your Keyword Meta Tags.

Title Tags: Title tags play heavily in your ranking for a search on Google. Title tags with just your company name on every page are not going to cut it. Or are you a victim of "new page 1" title tags because you forgot to name your pages? If so, go fix your Title tags right now!

The Title tag is what appears at the top of a Google search result, so it should describe what your business is all about and should include keywords people would use to find your site. Google will read about 59 characters (including spaces) in a Title.

Description Tags: This is a description of your site that is attached to your pages. Use descriptive words and avoid filler words such as the, at, in, etc...but remember, it is the description that appears in many search engine results pages, so it should make sense. Your description can be up to 150 characters long to considered to be search engine friendly.

ALT Tags: Google also reads the ALT tags that are attached to your graphics. They are a good way to include more keywords in your web page. They are also the words that appear when you move your mouse over a graphic (For more information on ALT Tags, click here.

Content: Google searches the content on your site to return relevant search results. Be sure to include relevant keywords in the text of all your pages. Also, try to keep them near the top of your pages - Google may not crawl all the way down your page.

For example, if someone would search for your site with the keywords "cloth diapers" - be sure to include those words in your Title tag and near the top of your web page.

Domain Name: Having your keywords in your domain name may boost your ranking. Google seems to favor sites with keywords in their domain.

For example, if you search for "diaper" on Google, the top results have the word "diaper" in the domain name.

Those are just a few basics to Google rankings. Incorporate some of these suggestions into your web page, wait for Google to update in a few weeks and see the difference. Determine what works and what doesn't and continually improve your site based on what you discover.
 

More Search Engine Information: Highly Recommended! 

Check Aaron Wall's SEO Book.  Aaron's book doesn't leave any stones unturned.  He covers everything you need to know about getting traffic to your website and legitimately ranking well with the search engines. His book covers all the nitty gritty details in an easy-to-understand way.