How To Properly Interlink Your Website Pages [video]
Site structure is probably one of the most important aspects to how well your SEO will work for you. One of those efforts that can determine having successful search engine optimization efforts is interlinking. Interlinking important pages helps pass and funnel power through the site but it is important to realize that this step should never be abused. There is a right way and a wrong way to do this and Matt Cutts explains this topic in detail below.
Strategically identifying keywords that lead to pages supplying information regarding the hyper-linked keyword. This strategy should always be used with moderation as well as too many links could hurt.
Randomly picking mass amounts of text and keywords throughout your site and over interlinking pages could give you a penalty by the search engines.