Link wheel is a widely used internet marketing strategy. The basic idea of link wheels is to create a pattern of links which flow from one website to another which would finally link to a targeted website requiring promotion.
You write 10 articles all related to the keyword you are targeting in your link building.
You submit those 10 articles to 10 different article directories (ie ezinearticles.com, isnare.com etc).
In each article you place two links; One link to your site using your keyword, and the other link would link to one of the other 9 articles you have submitted to the other article directories.
Thus each article is connected to your site and to the other articles written that also link to your site and that is why they call it a wheel