Google Indexing and PageRank Algorithm: How does it work?

Google indexing works in ways that I don't understand. Well all I know is that the spiders got to me and doing a search on "optimizing firefox", I was 3rd on the list. Now ain't that cool!

PageRank Algorithm:

PgRnk(pg1) = (1-d) + d { PgRnk(pg2)/C(pg1) + ... + PgRnk(pgn)/C(pgn) }

Well OK it's simple math here.

o PgRnk(pg1)..PgRnk(pgn) = Page Rank's of Pages
o C(pg1)..C(pgn) = Number of outgoing links from those pages.
o d = damping factor(value of d between 0 and 1) usually set to 0.85

And how does it work?

Basically it all comes down to

• Incoming links: They are all welcome, and even the bad one's will do nothing but enhance your position on the Google's indexing world. Worst come worst, it'll merely do *nothing*, if it was a negative link. So you're safe (kind of).
  
• Outgoing links: The fewer the better, the one's with same pagerank and the with the least outgoing links will be the one that'll give you a better position on the index.

Page Rank Calculation: Well having all the incoming (and harmful links, if you will) will not just be bunged in the calculation. It's all cleverly calculated and preserved. See how a pagerank calculation works here. Mark Horrell has done enough work there so he deserves the credit too.