Interesting article I read today
http://www.seomoz.org/blog/how-organized-crime-is-taking-control-of-googles-search-resultsSimply put, anchor text is the text in a link.
Anchor text is important because search engines use it in their algorithms to determine their rankings. Here’s how it works. Search engines are constantly checking the anchor text of your site. Each time you get a link from another site, the search engines will note the anchor text of that link. With each instance a word or phrase shows up in your anchor text, your chances improve for increasing your ranking for that word or phrase.