When I link to other sites without them linking back to my site, what does that mean for my own site PR? Is there some other reason why most people are so reluctant to link to another site?
You don't lose PR by linking out. However, the more links out you have, the less valuable each one is. People don't want to link out because they don't want Google to think they are being paid for links, or that they are a link farm, or they just don't want to be spammed to death.
Also, rember that if your site is about cat food and you create a link to another site with similar keywords, you are creating competition for your own site. However, it was said by Matt Cutts, that linking to external that are bringing further informations to your readers is welcome.
People are reluctant because they are idiots hoarding PR. Adding an extra outbound link to a typical page only reduces the PR passed to the other outbound links by a miniscule amount. If everyone thought that way, people's web sites would be islands... It's the interlinking that makes the worldwide web a "web". Link out freely... The only thing to remember is the IF you do not trust or want to vouch for the site you're linking to then you should "nofollow" the link. But if you're linking to another site that you think will benefit your users or that provided useful content that you used or want to share then they deserve a followed link.