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Volitional Links reveal the value and trustworthiness of your site.

It's easy to tell when you're visiting a page or a site created by an SEO. Titles are nice, URLs are nice, images have ALT tags, and there is a certain self-consciousness evident in the links they have made and in the ways they have made them. I am not talking about intra-site navigational links. I am talking about the links that are made purposefully by the author of the page. These links are, I have been asserting for a while now, the important links on a site, because they reflect the ideas and intentions of the author. Because blogs and other CMSs automatically generate the navigational links, Google knows to treat them differently. What Google is looking for are the choices you have made when you created your links. This is where you will reveal wehether you are to be trusted and whether your site contributes value to the Web, and if so how much. Blogroll links, while more telling about you and your blog than automatically-generated intra-site links, are less important to Google (unless they reveal a gross Trust Violation) than what I am going to call Volitional Links.

So, let's define that term.

A Volitional Link is a link you make from anchor text on your site to an offf-blog/CMS or off-domain resource that you want to relate specifically to the anchor text, somewhat less specifically to the page you're linking from, and still less specifically to your site. On a blog, they are the links you create within your posts and pages.

Here's an example from Google's Inside AdSense Blog:

Success without borders

When we visit our favorite websites, we have very little insight into the person who created them other than recognition of our shared interests. A publisher in India might own a website about his penchant for classic American cars, and the majority of his readers might reside in the UK. The beauty of the Internet is that each web page could have been created by anyone, anywhere in the world -- and the site's readers are often as demographically diverse as they are a group of like-minded people.

This is where AdSense comes in -- publishers can earn money for something they probably would have done for free, i.e., writing about subjects they love. Since ads are targeted both to the content of the page and the location of the user, there are no geographic limitations on who can succeed. This puts publishers in the developing world on a near-level playing field with publishers in the developed world when it comes to earning money from their interests. We've heard stories from publishers in all parts of the world about how AdSense earnings are being reinvested into creating better websites and content, or spent on life improvements including new cars, vacations, education and even engagement rings... more

In the above blog excerpt, there are three text links. Notice how this Google blogger uses sensitivity to his context, careful selection of anchor text and carefully selected external resources to enlarge and clarify the meaning of his own post. This is the sort of example you want to emulate. This is the sort of thing I see SEOs getting wrong all the time.
Below I am going to suggest 2 hyperlinking methods that achieve SEO objectives and make for good pages and sites.

Why Use a Hyperlink?

1. To provide a specific or empircal example of the subject (or "thing") being discussed. This can be a link to "the very one", as in linking anchor text "Peter Lorre" to peter-lorre.jpg. Or this can be an example of kind, as in Peter Lorre. It is understood that such links should go to Subject Authorities. This rule may be set aside, however, to bring to light a new resource not already in the index. But such links should be used in addition to, not instead of Authority Links.

2. To join an "excerpt" to the excerpted original whole. If I were writing an analysis of the Gettysburgh Address, I would likely include excerpts from the full text within my own work. It is logical to expect that a reader of my analysis would appreciate such an Excerpt Link. The use of the excerpting practice and of excerpt links is not only convenient and helpful to the readers of our pages. It also allows secondary publishers to save space on their own pages and avoid the unnecessary duplication of resources that are already in the index.

It is important to note that the usefulness of excerpting is not limited to text. We may consider that any "whole" is an excerpt candidate, so long as the following conditions apply: a) The whole is either an original or a trusted iteration* (*It is understood that some high-demand resources will be served by multiple parties. In such cases, duplication is a service to the community, and the value of the service is a function of trust.), b) The whole is of such nature that a "part" of the whole tells something of the whole, and that the whole will expand meaningfully on what the part may tell by itself. Unique collections or sets of things are an example.

Observe, it is not necessary to be the author or creator of the collected things to create a valuable resource in its own right. Value exists in the collection itself, and in the effort implicit in creating the collection. Of course you must always provide an attribution link to the source site. Take, for example, a full-text version of Alice in Wonderland and a collection of images inspired by the book. The text you would expect to find easily from multiple trusted sources. Likewise, an image search would return many images of illustrations, paintings and photos of stage performances, etc.

Even when there seems to be an abundance of resources available, we discover it is still possible to create new resources that are valuable simply because they increase the usefulness of existing resources or because they bring a new perspective to them. To continue with the Alice in Wonderland example, we could conceive of a new resource that earned its value by joining some of the images returned under "Alice in Wonderland" to specific sections of text from the book. There are likely many images in the index that the Spider has not resolved to a greter resolution than the string "alice+in+wonderland". To clarify the image for the spider further, either by associating it more closely to a specific section of the book with anchor text or by writing a more descriptive ALT tag, is to provide a useful service.

Conclusion

Don't lose sight of the fact that you are making pages for people. I spend a great deal of time talking to the Spider, but have found it listens best when I speak to it like a human.