You can still link to a site that has low pr as long as the site is related to your site.

Google made it just to rank your site if it's trusted or not. It doesn't really matter to ordinary people who just loves to browse.

Page rank is the credibility of a site.. If your going to exchange links on relevant sites with high PR then you'll have higher chances of getting into top rankings and high PR as well..

I have PR0 sites that rank very high on competetive terms. The sites are high quality and good content. I think PR is getting less and less important and quality of the site is getting more and more important.