Does anyone know if page rank directly effects a site, or is it just a measurement of quality?
I'm not sure of the technical answer (no one is really) but page rank matters as far as getting links from other sites is concerned.
If you ask another webmaster for a link then he will most likely look at your page rank? Also Someone is more likely to ask you for a reciprocal link if your PR is 2 or over.
In this respect it matters a lot.
In terms of everyday search performance, I don't think it makes much difference though?
Page Rank does NOT effect your search engine positions in any way, you could with some knowledge overtake a site with a PR7 even if your site is PRO, page rank means very little these days, it is true most webmasters will only exchange links if you have some page rank, don't become obsessed and it will appear naturally in time providing you have some links to your site.
Thanks everyone for your input, i have read articles on the subject but with so many opinions out there, its been hard to come up with a definitive opinion of my own until now.
Basically Page rank was absolutely MASSIVE 3 or 4 years back along with the once a month 'google dance' (remmeber that!), and was the be all and end all of link exchanges and SEO.
Nowadays it does not carry half as much weight although some webmasters have difficulty in letting go of this concept ie. charging increased money for a link on a site with 'higher pr'.
I'd say if a website looks good (in the eyes of google), has no penalties and ranks highly for some good keywords in your chosen sector or niche I would say fill your boots up and by all means undertake some exchanges even if it is pr1 pr2 or pr10.