Local Link Building & Google LocalRank
The more interconnectivity there are amongst the top results the more algorithmic weight you could place on interconnectivity. Many search queries are not as competitive as they seem at first glance, because in some industries there are few industry hubs, so many of the high PageRank sites have little interconnectivity. If 10 to 20 of the top 200 results rank at your site and only 2-3 rank at most of the other top results it should not take much (if any) additional general authority to outrank competing sites.
Also keep in mind that pages which rank #50 for your main query may rank #2 or #3 for related queries, so links from top ranked and mid ranked related resources can be great in providing indirect value (ie ranking boosts) AND direct value (ie traffic). Some algorithms like these might make SEO harder if you use outdated techniques, but if you use current techniques it makes SEO easier because you do not have to deal with trying to get as many links if you are focused on getting the right links.
Keep in mind that if a site has enough authority it can rank well without needing much LocalRank, but getting links from related resources makes it easier for you to rank without needing to bulk up on building up tons and tons of PageRank.
I doubt Hilltop was implemented exactly as described in that paper (especially since I have many affiliated sites ranking next to each other in search results). Other biasing algorithms, like , likely allow Google to topically bias or personalize search results while perhaps still making it rather hard to manipulate them when compared with algoirthims such as Hilltop.
Aaron Wall, Search Marketing / SEO Coverage and Rants – Aaron Wall is one of the most vocal search engine marketers in the business and he has channeled his thoughts and expertise into his widely popular eBook, SEObook.