Your question is way to broad, you're going to have to do some deep research on Google and go on websites and read articles that speak about link building. If you could break down your question to a more specific question, then it'll be my pleasure to answer your question.
Link Building is the process of creating inbound links to ones own website. This can be done by reciprocal links, being listed in e-zines, newsletters, directories, search engines etc. Link building is one of the best ways to make your site popular.
Link Building is a process in which you build links (place links) on other sites and let your site be known around the web. Basically what you are doing is increasing your web prescence. You can build links by a number of different ways like article submissions, forum posting (with the link in the signature), blog comments and social bookmarking. As this is the age of Social Media you can also attract visitors by making a facebook fan page.