"Wheel" is nothing but a circular constraint. In SEO it's nothing but a circular technique to get tons of traffic for your website's main page by relating one topic with another in a chain system. It also boosts your SERP ranking in this way.
Suppose you have written a squidoo lens with a link back to your main website. Then you have written an article and published it on different article directory sites and link it back to the previous squidoo lens. When your article get the web approval, it will also show the link with the squidoo lens. Now, you have written a hubpage about the same topic as above two and posted it with a link back to the above article. Again, you have done a blogspot from blogger.com with a link back to the above hubpage.
Again, you have done a Google knol with a link back to the above blogspot blog and in the same way you can connect different web interfaces to each other.
Ultimately you have created a wheel structure and linking one interface to another in a chain form which ultimately linking back to your main website.
By this way you are generating lots of traffic for each interface pointing another through the link and each hit counted would ultimately boost the main website SERP ranking.
The above whole process is called "link wheel".