Internal Links and Website Navigation Links( SEO )

Good internal navigation links will help the search engines’ crawling of internal pages and also PR distribution.

For information on Relative Internal Links vs Absolute Internal links and SEO CLICK HERE

Overall;
1. Keep the navigation as simple as possible.Avoid flash or java script.
2. Make the home page accessible from all the internal pages.
3. Use breadcrumb navigation technique.
4. If possible,make all the pages accessible from Home Page (although in 90% of sites it is not possible ),otherwise make your important category pages accessible from home page.
5. Use site map.

Much of the above depends on the size of your site and how many, if any, distinct category sections there are to it.

Small sites
For very small sites, you can can easily link every page to every page.

Medium Sites
For medium sized sites, it may well be possible to include links to every page from every page by using css/javascript drop down menus. If there are no very distinct sections, and all pages are along similar themes, this can work. As already mentioned though, keep total link numbers below 100 and ideally under 50.

Large sites
For larger sites, in the main navigation on every page it’s best to link to the main page for each distinct section, plus the usual pages that site visitors expect to find in the main navigation (eg, home, contact us). Within each section link to the next hierarchical level as a sub-navigation, and so on. That keeps the relevancy of each section focussed.

You can use footer links for pages such as the sitemap, terms and conditions, privacy policy, and another link back to the homepage. These are all pages that you want visitors to have access to on every page, but don’t necessarily warrant inclusion in the main menu.

Also use a breadcrumb trail for larger sites.

Within the main content of the page, you can then consider using links within the text as and when appropriate. You can also use links from the main content of the homepage to inner pages that would benefit from appearing high in the SERPs but would ordinarily be two or three levels down in the hierarchy.

Behemoth sites
Much like the large site navigation, but each section becomes more like a website in it’s own right. Could even warrant the use of separate subdomains for some of the sections.