In order to avoid manipulation of the ranking system Google chooses not to share the details of their algorithm, keeping us all guessing and trying to keep up.
There are some constants in the algorithm that have remained the same since its inception. Google relies heavily on a number known as "quality score". This score is assigned to your website based on the quality and relevance of your content and your URL. In other words, your URL needs to say something about who you are and what you sell. The same is true of your content. It needs to clearly define what you do and contain keywords relative to your industry.
Another factor that weighs heavily in the page rank calculation is the number and quality of the links that connect to your site from outside sources. This is an area where Google has made many changes in the past few years and they generally don't hide the fact that they are doing it or why. In the past SEO companies could submit a single article to multiple directories with automated software. Each of these articles provided a backlink to their website when it was posted. Those who could afford the best automated software had a distinct advantage over those who couldn't. Google recognized this and changed the algorithm to level the playing field. Duplicate content no longer counts as a backlink and the quality score and editorial guidelines of the article directories themselves are now also taken into account.
Similar changes have been made in the weighting system to give less credibility to links provided by "link farms" or sites that are put up just for the purpose of posting links. By factoring in the quality score of sites that link to your website Google can determine whether or not those links were built by automation or spamming. The bottom line is that in order to attain a high page rank now you need to have links to and from sites in your industry and relative content that clearly states what you do and what products or services you have to offer.