Social Bookmarking for backlinks, could someone please explain exactly what it is for me?

Hi guys,

i have seen plenty of threads, comments and articles talking about how social bookmarking is a great source for backlinks, even more so now since the most recent Google algo update.
But i have never understood exactly what it is, is it as simple as creating a page on facebook and an account on twitter both with links to the website i want the backlinks for?

Any help would be greatly appreciated. Also, if that is how you create social backlinks, would doing something such as buying fake followers and fans increase the value of the backlink to my website?

Thanks,
-Michael