The following is one example of "anchor text" :
On some of our pages you may see a notice:
Yes. You do have permission to use a direct link to this page using this page's title as the anchor text
An example of using anchor text to create a direct link to our page is:
<A HREF="http://www.reasonablepower.com/">WIND POWERED GENERATOR</A>
The words WIND POWERED GENERATOR
are the anchor text.
The web page that is linked to is http://www.reasonablepower.com/
An example of using anchor text in a link inside of a sentence on a web page:
Here is a <A HREF="http://www.reasonablepower.com/">WIND POWERED GENERATOR</A> web page.