There are three kinds of links here on Everything2. Hardlinks are located within the body of the writeup. Firmlinks are located above the node itself and point directly to a closely-related node. Softlinks are located beneath all of the writeups. While a hardlink doesn't usually change unless the writeup author changes the hardlink, it's possible for the softlinks to change quite a bit, as different people link other writeups together. The more often a softlink has been clicked on, the higher it rises in the softlink list, indicating its importance to other noders...
There are two different ways to create a softlink. The easiest is to click on a hardlink -- a new softlink is automatically created both at the original node and at the linking node. The other way to create a softlink is to type the name of a node into the search bar at the top of the page. Again, softlinks will be created at both nodes.
So why are softlinks important? Well, it makes E2 a lot easier to browse through. If you're looking up a node about, for instance, Japan, all of the softlinks at the bottom of the node will give you some more places to go look up related information. Of course, there may also be a number of seemingly-unrelated softlinks at the Japan node, like Pete Townsend, confusion, Satan, This node sucks, or Detroit. This can mean either (1) there's actually a connection between the two links that you weren't previously aware of, (2) some people like to link insulting comments to writeups, or (3) the universe is a random, chaotic place, and it's impossible to make sense of everything that goes on. No matter what the explanation, there are important things to be learned.
And why is it important for you to make softlinks to all your nodes? Well, it makes it easier for people to find what you've written. Very few people are just going to randomly surf onto your writeup about The Day I Caught My Dog Having Sex with My Cat -- it's just not something that people tend to go searching for. But if you create softlinks to nodes like dog, cat, sex, and other important and related topics, then people who are reading about dogs, cats, or sex may see your softlink and could click over to read your (hopefully) undying prose.
Here on E2, the softlink is of paramount importance! Worship it as you would your gods! Remember the softlink, and keep it holy!