Matt Cutts answered that on a YouTube video a couple of years back at http://www.youtube.com/watch?v=Qigo05nAqKw. I've copied the transcript of his answer below.
In general, we don't promise that site colon queries will rank in the exact same order that other pages would rank in. So we do use a few different factors. We do use some version, roughly, of page rank, but it's not exactly in page rank order. We also look a little bit at, for example, maybe how short the URL is, and those tend to be URLs at the root page or one directory down, and those tend to be the pages that would attract the most links anyway. So it's kind of a combination to sort of trying to surface the pages that we think are useful, either according to page rank, or interesting in terms of being relatively short, so it's something that's pretty important or pretty close to your root page.
But I wouldn't necessarily say that, and it's not the case, that it's strictly in page rank order or anything like that, at least the last time that I checked. So it's a relatively good proxy of the pages that might be kind of interesting, but I wouldn't treat it as a perfect list. You can always go through your server logs and figure out which pages are driving the most traffic, and sometimes those are going to be deep URLs, for example, that might get a very specific link or that rank for some other reason.