Links are #1, they build Authority (so actually Authority is #1) (off site optimization) is all about links, their anchor text and if they are 'no followed' or not.<p>Site design alt tags, title tags etc... are #2 .. read here for more ranking factors...
<a href="http://www.seomoz.org/article/search-ranking-factors" rel="nofollow">http://www.seomoz.org/article/search-ranking-factors</a>