Recently, Ryan Caldwell posted to this page to ask the community an important question: do link titles really matter? It's a very good question, especially since bloggers that use WordPress and other software see this option and - as far as I can tell - rarely grab it.
Yes, yes, yes! Absolutely make sure you title your links, even though it is a bit of a pain. If you read this blog, you will find that a recent study proved that link titles do in fact get factored into Google's PR. And in fact, if you bother to label ALT tags, I can't imagine why you wouldn't take this opportunity to provide bots with even more keyword-rich text.
And then there is the real reason for link titles: for the benefit of disabled persons, specifically the blind, so that they have some idea where they're clicking to. Just for that reason alone, it's worth the relatively minor trouble.
And moreover on that issue, there has been a trend with Google's search algorithms towards a "human experience"-centered crawl. What that means is, the bots crawl your site in ways that are expected to approximate a human reader's perspective. In other words, rather than reading all words on a page from left to right, they follow the margins of your columning like a reader would when reading an article.
In part, the idea is to weed out crap on the margins and in your blogroll, for example, from relevant words in the body of your articles to more closely match searches to usable articles. And in part, the idea is to weed out sites playing games with keywords and not providing human-usable content; ad-revenue link-traps, in other words.
It stands to reason that Google would regard link titles that make sense and aren't keyword stacks to be for the benefit of readers and of the disabled, specifically. There's good reason to believe that providing for a variety of human readers will likely improve your stack ranking, as indeed the above-linked study suggests in just about it's every conclusion.
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