Link bait can be an extremely powerful form of marketing as it is viral in nature. Matt Cutts defines link bait as anything "interesting enough to catch people's attention."
Here are some good articles on link bait for your reference: http://www.brickmarketing.com/define-link-bait.htm http://www.seomoz.org/blog/the-two-kinds-of-linkbait http://www.problogger.net/archives/2006/09/21/20-linkbaiting-techniqes/
One of the best link bait ideas is some sort of contest that involves peope linking back to your website.