It's the pagerank of the backlinks you have. The higher the PR of the page linking to you the higher your PR will be.
PR is not important is just a number So don't come obsesed by PR Concentrate on Ranking that's wat counts
Unique content is far more important than PR. Focus on niche oriented content as good quality links will simply follow.
There are various things effecting PR of your site. Some of them are 1. Number of backlinks you have. 2. PR of the page from which you get the backlink. 3. Number of links present on the pages from which you get backlinks 4. Age of your site Relevancy of links do not effects PR of your site but would effect SERPs.
Does it also depend on the "content freshness" of the site? I know a website that is near 7 years old and was VERY popular. Many high quality backlinks. The past 2 years the site has done NOTHING and sits still without changing any content. Backlinks are still there. Now has PR0
Backlinks is not directly related to content freshness. One of the reasons why there is a drop in PR is simply because the most of the backlinks' power have deteriorated. For example, a link in a fresh article in eZineArticle.com now is not as powerful 3 years later.. why? That article may have been removed or it will be archived in a deep deep directory level.