The concept of building backlinks is simply to get links that are pointing back to your site.
This can be done in a number of ways and I will explain some of the most common ways and why you should make an effort in building links.
So, why should you build links back to your site? Well, the first answer would be that they can give you traffic back, people will see the links and click on them.
But also the people you trade links with might find your site interesting enough to come back to.
Getting your links out there will start the word of mouth or viral marketing a bit too.
People notice your site and will start talking about it, which in itself will bring more people to your site.
Of course there are more things behind the reason to build backlinks.
Search engines.
It used to be that you got a good domain name and added some relevant search words to your title and meta tags, then put it a few times on the site itself and voila! Altavista came to eat your site up and you got a placement in the top three links on your term.
Obviously, that doesn't happen anymore.
The search engines have become a little bit more complex than that (even if that was quite complex to figure out back then too).
One of the things that add to the complexity of the search engines is popularity.
The way search engines, and perhaps Google more than any other, is by looking at what sites link back to yours.
This does not mean that more links is better even if it might seem so at first.
What you want to do is trade links with sites relevant to your topic and you want to trade links with real sites.
If you try to submit your site to link farms you might end up getting penalized by the search engines.
Search engines see it as your site being more popular if popular sites link to you.
Or in other words, if more popular sites link to yours, it will be seen as a link that weights heavier on the search engines ranking of your site.
To get started with the building of backlinks go out and search for sites that you like and find would bring value to your readers too, e-mail the webmaster and suggest a link trade.
But, don't get too carried away.
You don't want to turn your site into a linkfarm itself.
No one will want to trade with a site that links to a billion other sites.
Apart from the old fashioned link trading described above remember the social bookmarking sites.
These sites usually have very good popularity themselves and you can get your links up there without having to link back to their sites.
This form of links will give you even more popularity with the engines since they don't see it as a link trade but as people just linking to your site because it´s that good.
There are a ton of social bookmarking sites out there, so you have a lot of work.
Something that is very powerful is to use forums to build backlinks.
And no, I´m not talking about spamming forums here, that´s always a big no no.
Find forums relevant to your topic.
If you don't feel comfortable diving into discussions right away then follow the forums for a while before you make your first post.
This is generally a good idea even if you are familiar with the topic, just to get a feel for how the discussions usually go.
When you do make your first post you simply have a link back to your site in your signature file.
Most forums are very strict about posting pure links in their forums but having a link to your site in the signature is a common and accepted way to get your site noticed without being pushy about it.
The last thing I will mention for building backlinks is directories.
Directories are like search engines but the listings are checked by real people.
If your link is accepted it will be listed without you needing to link back to their site, so again, it´s the better kind of links.
As a last addition I will just mention this, stay away from automated ways of getting your link submitted to a number of sites.
It usually end up hurting more than helping.