Incoming links are links from other web sites to your web site. Not just any old links, you must accumulate links to sites that are relevant to yours. And, the higher the Google page rank, the better.
Link farms, robot link building software, and signing guestbooks won't cut it anymore. This is serious business.
So, how do you do it? Write relevant blogs, make relevant comments on other blogs, link to your myspace & facebook pages, but be sure your profile has links back to your site and that the content on those profiles is valuable and relevant to your main site.