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I came across a good post from Digitalpoint, and I think that is a good post to explain the relationship between PR (PageRank) and SERP. So, let's enjoy it.

Does PR really matters? Is SERP is everything? Is PR only good for link selling? Is buying links right? Or is selling links wrong? Can I gain any advantage with PR against my competitor? Can PR actually help me with anything at all if I am not selling/buying links?

In my opinion it really.... depends on your own ethics and needs as a webmaster and your purpose for the site overall. As for me, I don't buy or sell links, never did and never will cause according to me it is unnecessary and I believe in my own capabilities to be linked to by others.

In my honest opinion:

a) PR does matter, and it matters quite a lot. Why would it matter? How can I prove that? It matters when you search for the most competitive terms and only the ones with good PR turns up in SERP's first page. PR matters when you want reputation of a site not only in SERP rankings but in other people's opinion. PR matters in terms of trust also, a visitor who has the slightest idea of PR will know the difference of a PR less site and one without it. Does it mean that a site without PR and sites just starting up doesn't have that capability? Definitely it has the capability. Everyone starts from the pit, the very bottom where PR is non existent. Building trust and writing/creating "quality" content will earn that trust even if you do not have a PR. With that being said, now imagine if the site also had PR beside that quality content and trust! Exactly, at least and even if you don't rank well in the search engine, the people (the savvy ones) who will visit your site will know its importance in terms of google's opinion to it all.... I mean, its safe to assume that PR is Google's opinion of you... say it isn't so?

Some say, backlinks are everything.... wrong! Backlinks are only part of the PR assessment... The correct term should be quality backlinks and the diversity of those back links.... With much less quality backlinks (I am not talking in terms of 50 backlinks of course... more!) than another site it is most possible to achieve a good PR similar, equal, more than that site. It is a proven fact!

b) So does it mean that PR can effect SERP rankings? Hell knows it can! Search for the term computer and check the PR of the sites of the first page... all have PR! Good PR! Now some sites with higher PR will rank lower in the search engine.... why? Because my good friend, PR is given to you after a certain period of time, rankings are much much much more dynamic and the "whole pie" of rankings is not ENTIRELY based on PR. It is based on number of links, people talking about it without links, the diversity of the links, and the authority of those links as a whole. SERP positions can vary everyday, every hour but PR (talking about Toolbar PR here which... we can find out right?) varies only after a certain period of time. To me, SERP is determined by much more complex stuffs than PR, but PR is a big chunk of its determination. Coming back to the "lower PR higher serp" issue we will see that the difference in terms of position is merely between a page, meaning, if the lower PR site is at number uno then the higher PR site is there within the first page. BUT, in the long term without quality contents, that lower PR site will surely fall and that is a fact. But, the factor of time depends on the niche itself. Some niches get new content every one second and some does within a week so definitely the niche you are in really does matter.

c) Those saying PR is only good for link selling is absolutely blind. There are enough non profit organizations and bloggers and personal sites out there which can prove it wrong and I am one of them. I don't brag about PR (Hell my site is down right now!! ) and I think there is nothing to brag about, cause PR does the talking itself. Link buying/selling for PR in my opinion is just ugh!!! But, if you are buying/selling it for traffic then its a whole different issue but we are not going into that.

d) PR is very useful for ranking well in the SERP engine and I hope searching for the term of computer proves that. Like, Dell's PR is 8/10 and Apple's PR is 9/10. So why exactly would DELL be up there over Apple in the rankings? Because, its a general fact that Dell is much more popular to people than Apple is. So Dell ranks better! So next question is why don't Google presents Dell with Apple's PR or better? Simple, cause in terms of web development (I am talking about internet and not designing) Apple is much more relevant and "giving to the community" than Dell is and Apple is gifted with that PR 9 (once again in my opinion). In this world's economy not always quality comes first, sometimes we will compromise on quality if it is of a lesser price and easier to implement and that is the case with RANKINGS. PR is what the VALUE of a site is, RANKINGS is the POPULARITY of a site as a whole. Blackhatters can manipulate rankings big time but not in the long term, NEVER! Google is quite supreme and end of the day Google's search engine is an user friendly search engine.... NOT a webmaster friendly and that is the way it should be.... cause unlike you and me, others are not webmasters! It is OUR duty to get used to that cause that is how it SHOULD BE.

Lastly, as an webmaster it is your duty and motivation to serve your visitors right? If that is the case, then there should not be any problem with anything cause visitors give you PR. Not all visitors, NO... visitors who are other webmasters or visitors who are friends of other webmasters and who will promote your site for free. That what gives you rankings, both in terms of SERP and PR. This is the very reason why non profit sites do so well in terms of SERP and PR both, cause they simply do not care about it well and goes for quality content and so should everyone!

Lastly, PR matters like hell... and it will always matter cause PR after all haven't got any drawbacks whatsoever. And if your ethics are right in terms of PR, its easier to get than to lose it.