Google BL Paradox..or is it?

Anyone who can clarify on this issue will be much appreciated. I have noticed (as well as probably everyone else here) that when utilizing the link:www.yourdomain.com utility in G search, you will inevitibly turn up BL's from the same site's subpages. for example, a link:www.yahoo.com search turns up multiple pages from Yahoo's subdomains as BL's to the Yahoo homepage. but does this mean the following equation holds true?

homepage acquires links from other sites -> homepage pr goes up to pr4+ -> homepage passes new pr to subpages -> subpages pr goes up to pr4+ -> google counts subpages (of the same site as homepage) with pr4+ as BL to homepage -> homepage pr goes up even more

this seems like a bit of a paradox to me. i've often heard the theory that increasing the number of pages on a site inherently increases the available pr of the entire site. is this only true if the pages created eventually acquire pr4+ and are counted as BL's to the homepage as detailed above? this would seem to limit 'spam' pages like sites who have 10,000 pages with hardly no content from being able to increase the overall pr of a site just by their very existance.

Is this a BL paradox, or just the natural progression of a site's PR?

You're understanding of the PR algo is off. The algo is a recursive algorithm that reaches a stablized value after iterating many times.
Whether or not a BL is being displayed when doing a link: search, the PR is always being passed. Whether a page is PR0 or PR10 ... its inbound and outbound links will dictate its PR value.

No way for me to put into words as clearly as these two articles:

http://www.webworkshop.net/pagerank.html

The examples that start midway through this second article are priceless:

http://www.iprcom.com/papers/pagerank/index.html

Thanks for the articles, but I'm referring only to the question of how a link from the same site can be listed as a BL to itself, not to the PR algo in general. all offsite links count and transfer pr regardless i know (or at least we assume) and google only shows pr4+ links yada yada, but how much pr can a same-site BL pass to basically it's own site? major sites BL lists are injected with numerous BL listings from their own pages (such as subdomains and such). how much does this boost the index? I'll check out your submissions as well.

internal and external BLs are treated the same in PR calculation. But external BLs are weighted more in computing SERPs.

so large, well-ranked sites actually generate and feed off of their own pages pr? interesting...the underbelly of pr9-10 sites?

Google may assign the internal pages with PR passed from the site indexed and other gateways. But that does not at all mean that those internal pages have any significant effect on your ranking.

"link:" tells you whih PR4+ pages are linking to a site. It tells you nothing else.Most imporant, it does *not* tell you how those pages may or may not affect ranking.

From experience, internal links are of generally limited worth, regardless of PR.