Link building is the process of creating inbound links to your sites. It helps in creating pageranks and helps sites exposure. Also, it helps site indexed by search engine. There are different ways to build links such as article submission, directory submission, forum signature, social bookmarking, SEO, and many more.
here is short article about link building for newbies you can read it http://shotazi.blogspot.com/2008/05/link-building-tips.html