I do SEO oriented Web design for a living, and I’m convinced that backlinks are just one of *many* factors that make a page worthy in Google’s eyes. Just like Page Rank and meta keywords, I don’t get too upset about backlinks. And I just laugh at the professional SEOs who come up with those linking schemes only to see their SERPs dip every so often with the continual Google algo changes.
What makes good optimization (and if you think about it, optimization is just a method of displaying information to the search engines) is a holistic approach. Clean markup, minimizing scripting, simple relevant nav, descriptive labels on buttons and links, use of the title and h tags, strong (I mean really strong copy) keywords that *actually correspond* to the site content.
Also, I have seen evidence on my blog especially that Google does take traffic into effect when determining SERPS. If I have a newsworthy post, I will sometimes see it in the Google Web SERP within a day or two after posting. If the post grabs enough traffic, it will stay on the SERP, if not, it will revert to being on the Google Blogsearch. YMMV, as always.
The Google algorithm has been changing constantly and not only is that due to SEOs gaming the system, but I also think due to the fact that Google’s aims have been continually redefined. Is it good to have product results on Google Web search? What about Blog posts showing on Google Web search? I’ve stopped worrying about specific factors (i.e. PR, backlinks) and mainly look at SERPS for keywords and domains and incoming traffic.