Say that I have a site site.com with a few pages site.com/a.html site.com/b.html site.com/c.html site.com/yougetthepoint.html and I have links coming in all over the place... Say 10 on each page. Does this add PR only directly to the page linked to, or does it also have an effect on the page a level higher (so that a.html also gives PR to the index)?
It has absolutely NOTHING to do w/ content... PR is a measure of link popularity. PR does NOT have ANYTHING to do w/ content. Everyone who links to your URL w/ a DO follow link passes your URL PR (assuming both the URL linking to your URL AND your URL are both indexed at Google). It doesn't matter whether the page is on your site or not. If it links to another page on your site and IT (the page doing the linking) is indexed and has PR then it passes any page it links to SOME amount of PR (PR(currentpage)/#outboundlinks)... Every page that links to you (if it's indexed and YOUR URL is indexed) passes your URL PR, whether it's a page on YOUR site linking to you or another site linking to you.
@Canonical, what I meant was: does the PR which comes into my site trickle down to higher levels without internal linkage.