Folded paper with images of link hierarchy.

Links Matter

Internal linking rules for better user navigation.

Links Matter

Details on hyperlinks used in webpages.

For easy navigation and referencing you use website links in almost all page. And that's fine. It's a building block of usability.
But there are few cautions to follow, because while linking you transfer Pagerank to other webpages. If you do it the wrong way seo is going to suffer.
Also, make sure you don't get into link scheme while trying to get higher Pagerank.
Start by viewing 3 aspects to check your links in each webpage.

Webpage with text, linked in a pattern with smaller pages with text. Showing internal linking.
 
1. Image links

Use text most of the time and not an image inside a link. Search spiders can't read images. So, if you do so then use alt text in your image link.

2. Broken links

Once you click a link, you feel bad to see a 404 Error page. Others also do. So, don't have links that direct to a webpage that doesn't exist.

3. Hidden links

While following black hat methods people hide real links with coding tricks. Search spiders are smart enough to find out this nuisance.

Google map segment with map pointer and a compass at left side.
User Sitemap

You may offer your users a webpage with links
pointing to important areas of website.

Don't put in everything

Use minimal possible amount of links and place them in order to present a clear picture of site.

It's not compulsory

If your website is not well organized or too big to easily navigate, you may use such a sitemap.

Don't Have Too Many Links

It's not about your whole website. Rather a single webpage should have a "resonable" number of links. Including all internal and external links, any webpage must not have more 100 of them. Previously, webmaster guidelines used that number, but currently they don't. Yet you can take that as a limit if you don't want to be termed as a "Link Farm."

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