Insite linking is defined as " linking from one web page to another web page within the same website". It is a part of Internal linking. If you observe website trends closely, You will feel the difference in navigation techniques. Sometime Top Menu is in trend and then Side Menu. However in some search engine attractive website, you will observe Footer Menus, Side Menu, Left Bottom links, Inline links etc.

These Footer Menu, Side Menu, Links Blocks contains some categorical links of same website.These are called insite or internal links.

There are certain situations and objectives where you need insite linking.

1- Graphical/Flash website with less content

If you have less content in your website, then you can't adjust keywords in the content. Use some good keywords linked to your other website pages in Footer. These keywords will be cached and appear in searches.

2- Keyword Adjustment

If your website has dynamic keywords that should be changed with season or events. Like flowers or gifts are discounted on Xmas and Valentine Day. You don't not want to change the whole contents of website but like to change Footer Links to adjust this change.

Take example of Shopping Cart where Post Cards of valentine day are listed in category. Now to make that Category prominent, Use that Link in your website footer with attractive keywords.

3- Visitor/Bots Stay

If you know some catchy keywords that are not appearing in the content but have the visitor's demand. Use these keyword links in Footer, It will keep user on your website for more time.
Same thing happens with bots. Bots will stay more time on your website and will cache more keywords.

4- Keywords Density

Keywords density is very important feature for SEO and insite linking is one of best way to increase it.
For example I provide home windows replacement service in California, However I have some counties and areas that I cover in my services.

My website has the "California Windows Replacement" keyword.
What about Counties? What about Towns?
People may search like "Orange County Windows Replacement"
Here you can use your popular keywords for insite linking in Footer or any Side menu.

5- Categories/ Segments

Most of the time there are some dynamic content that is not listed. Like sub-categories.
For example,  Men's Jewelry is Main Category and Watches is Sub-category. Mostly Sub-category will be listed after opening Main Category.
What if you like to place some Sub-Categories on front page?

You will need Footer, Left Bottom or any portion of your website to show this content.

Now you have idea of the insite linking and you will like to see examples. So here are sample websites and images.

http://food.yahoo.com/

Another example of footer links is SEOMOZ

http://www.seomoz.org/