It helps the search engines determine what your site is about. We try and keep our link text quite short and specific to the page we are linking to. So for example if anyone wants to link to us we would ask them to link to this page
http://www.bodyjewelryshopping.com/b...-wholesale.htm
Link Text : Body Jewelry or Wholesale Body Jewelry
By doing this i would like to think that we are helping the search engines determine that this url is important for this search term.
If our link text was : Costume jewellery & fashion jewelry
then it wouldnt be very specific to that page and therefore less likely to rank well if these words are not relevant to that page