"Everybody is using it, but (almost) nobody really knows how it works. Google PageRank is probably one of the most important algorithms ever developed for the Web. With billions of existing pages and millions of pages generated every day, the search issue in the Web is more complex than you probably think it is. PageRank, only one of hundreds of factors used by Google to determine best search results, helps to keep our search clean and efficient. But how is it actually done? How does Google PageRank work, which factors do have an impact on it and which don’t? And what do we really know about PageRank?" A detailed article at SmashingMagazine.com
Well, we know that it is not as important to profit making as people think it is. Other than that, we know how the original algorithm works because it was published in a scientific conference. Since then, we know that we don't know nearly as much about it as we think we do.
The original algorithm is history. I wonder whether you have read the article because it is not made up of the "usual stuffs". Which factors don’t have an impact on PageRank? 01 Frequent content updates don’t improve PR automatically. 02 Content is not taken into account when PageRank is calculated. 03 High PageRank does NOT guarantee a high search ranking for any particular term. 04 Google considers site age, backlink relevancy and backlink duration. PageRank doesn’t. 05 Wikipedia Links don’t improve Page Rank. 06 Listing in DMOZ and Yahoo! doesn’t give your site a special PR Bonus. 07 Sub-directories don’t necessarily have a lower Page Rank than root-directories. 08 Meta-Tags don’t improve PageRank. 09 .edu and .gov-sites do not provide higher PageRank (or do they?). 10 Links marked with nofollow-attribute don’t contribute to Google PageRank. 11 Multiple votes to one link from the same page cost as much as a single vote. 12 Links from one page to itself don’t improve Page Rank. 13 Bad incoming links don’t have impact on Page Rank. 14 Dangling links don’t have impact on Page Rank. Ranking factors: 01 Efficient internal onsite linking is important. 02 Anchor text is important. 03 Google penalizes link farms. 04 Headers (h1, … ,h6), strong tags and semantic content are important. 05 The anchor text of a link is often far more important than whether it’s on a high PageRank page. 06 If you really want to know what are the most important, relevant pages to get links from, forget PageRank.
No worries, I did read the article. The article simply states the same things that you hear about PR all the time. These facts express mostly webmasters' guess of how PR is calculated starting from the bits of information that Google has released at times these days mostly via Matt Cutts. My original statement that all we know about Pr is that we don't know as much as we think we know is still correct.
Although your statement is correct logically, in terms of this thread, there is at least one person at Google who knows how PR is calculated; obviously there is more than one. I am sure that the team of software developers who implemented and modified PR over the years know very well how it works. It is the rest of us they won't tell and we have to make an educated guess about it