In the Control Panel, there is a "Rebuild link database" button. How does it work? What operations are carried out during a link database rebuild?
Retrieved from the SDN site
What is the Links Database:
"Sitecore maintains a table named Links in the database specified in the LinkDatabase section of web.config. This table provides a logical links database for all other databases – the links tables in the other databases are empty by default. Data is exposed through the Sitecore.Links.ItemLink class.
No matter how many databases are processed to create the links database, all entries are stored in a single table in the database".
The rebuild process will essentially update those records.