When designing or even when redoing a site consideration should be given to internal anchor text links. Internal anchor text links are totally under your control and thus are fast and easy to place. There are those who do not feel that internal links are of much value when it comes to ranking, but I feel that they are right up there behind external anchor text links.
There is no way to prove or disprove this concept but as an example, you can see that I have built this site with the idea of internal anchor text links and if you visit our ranking page you will see that the site ranks well and has far fewer external anchor text links than many sites which rank alongside it at Google.
Using Internal links effectively
If you have a 50-page site with each page having a menu system with anchor text links to every other page you will have added 2500 links to your site. If you use server-side includes to put your menu system into each page, it can be a very easy task to update the menus or to modify the links as you wish them, even varying the links between different sections of the site so that not all links have the same anchor text links pointing to a particular page.
This combination of a great number of links and ease maintaining them can be a very useful addition to your ranking arsenal, and in addition, will help your users find their way around your site more easily.
Making it easy for both the spiders and your visitors to find their way around your site will pay off with more pages indexed in the search engines and more people finding the pages you want them to. This, in turn, can result in higher rankings, better traffic, and improved sales. While the old rule of thumb is that a visitor should be able to find what he is looking for in three clicks is still a good rule it's still better if your visitors can view your menu system and gain an understanding of what your site has to offer.
While you're at it don't forget that a sitemap may be both useful to spiders and to your visitors if well constructed. I like to build my sitemaps so that I use the page title of the page linked to the anchor text link on the site map. It is only useful to have one sitemap and you should only link to it from one place preferably your home page, which is usually the page indexed more often, and thus will get changes to your site picked up quickly.
It's worth noting that there is a free tool Xenu Link Sleuth which will spider your site once it's live and construct for you a site map which uses the text of the page title as the link to each page. In addition, Xenu will find any broken links and orphan pages.
There are some great tools available at the Project Seven website to enable to you build attractive menu systems that are both spiderable and use anchor text links. Many of these tools are free Dreamweaver extensions but some of the very best have a modest cost.
If you use Dreamweaver and want to build navigation menus that are attractive, useful and helpful to your rankings these are highly recommended.
When you implement this type of dynamic menu system, remember that it tends to interlink all pages together, which tends to spread the PageRank evenly throughout the site. If you prefer to have some pages with a higher PR than others you may want to use this type of menu on selected pages only. On this site, we have used them on all but the home page.