Quality Of BackLinks ...What does this mean ?

Whats better a link from a brand new directory or a link for a website that is in your same niche that has been around for a few years? The answer is #2 and that is what is meant by quality.

Yes a good quality backlink is one that's on a good site/page that possibly has a good PR. You could have 100 backlinks on multiple sites that have no PR and a couple of backlinks on 5 sites that have PR5 and it will be better for you. Depending on what your anchor text is and assuming they are all the same. This doesn't mean you shouldn't still submit your site and carry on building backlinks. There are bilzillions of pages out there.

Think of them in tiers, kind of like a pyramid.

On the bottom you have "free for all" links that anybody can get as many as they want. These rarely get counted and are from wide open social bookmarking, directory and article sites as well as some blogs, purchased linking systems and blogging platforms that are heavily spammed.

Above that you have various moderated or controlled sources including blogs, social bookmarking, directories, articles, press releases, etc... The older and more established and more trusted by Google the site is the better the quality of the link. Having a relationship to your general niche seems to help but isn't always necessary.

At the top you have the most trusted and most authoritative sites for your niche and the Internet as a whole. Links from them can rocket a new site to the top and keep it there. However, they're hard to get, may not be permanent or followed and will usually fade over time.

PR or PageRank is a ballpark estimate of the value of the link but isn't always accurate. You can get a PR2 link that will have a greater positive impact on your search results placement than PR6 link. For example, a PR2 link from an article talking about your site and the niche in general on CNN will probably have a bigger impact than a PR6 footer link on a popular WordPress blog in an unrelated niche.

You basically want links from sites with higher PR. Google determines a site's PR, and that is a good indicator if they think a site is quality or not.