Your HTML site map should contain links to all of the pages on your site (even though you’ll likely choose to nofollow some of them). Why? Because it serves as a table of contents for your human visitors. The links should be logically organized for the same reason - you want to make it easy for people to find what they are looking for.

HTML site map pages are useful for conveying link reputation within your own website. Each link should use good anchor text that supports the optimization of the page to which it points. For example, if your Sacramento auto dealership has a page about previously owned Hondas, then the link text pointing to that page should contain appropriate descriptive text, perhaps Used Honda Civics or Used Hondas for Sale in Sacramento. While this is not as powerful as the link reputation you can gain from other good sites, every little bit helps when you’re in a competitive niche. Your site map page will need a PR of about 3 for this technique to kick in for you.

It is also wise to follow each link with a sentence or two of descriptive text that tells humans what they will find if they click through to the page. This will help them to find what they are looking for quickly and/or serve to pique their interest in visiting pages they might not otherwise consider viewing.

This also helps with your Search Engine optimization because it can take a simple list of links and turn it into a well-themed page containing contextual links, which are somewhat more well-regarded by the algorithm than links in footers, sidebars or lists. Here’s an excerpted example of this type of site map:

http://www.thehotelhighland.com/site_map.htm

It may not be practical to do your entire site map in this way, especially if you have a large website. However, you may still want to construct at least one page of your site map in this fashion that includes your most important pages. Then, your other links can be handled by your CMS or other software that automatically generates a site map for you.

There is no one type of site map that is best for all websites. Try to reach a balance of effort and probable rewards that you feel will work best for each site that you optimize.

See more information at HTML Site Maps Part 1