Juan,
The explanation below is a very good summary of the mechanics, but
misses the main point that Google's idea of relevancy is completely
disconnected from the real world. Furthermore, page rank is no
indication of anything.
You can check this easily by looking at the relevancy and PR of sites
compared to their position in results. You often find sites with low PR
and/or relevancy rated above ones with a higher PR or relevancy.
Also, the concept of relevancy is subjective. If I'm looking for info on
toe-nail clippers, MS's site is totally irrelevant (unless you know of
some info there about toe-nail clippers!!). Relevancy isn't something
that can be calculated in isolation, it's relevant to a particular
person's interests.
Unfortunately, the SEO world is full of people obsessed with PR and
relevancy, resulting in a corrupt abuse of the principles of optimising
a site. I use Google, but I don't trust their ratings.
This is not a rant at you, it's just something that generally irritates
me.
Ta ra