The Product Backlog is like a a wish list of requirements. The Backlog is like a living list that is always changing as stories are added, prioritized and deprioritized daily. It is the Product Owners job to keep the Product Backlog Items prioritized and constantly groomed to to allow maximum efficiency.
Not only is prioritization essential but story quality is essential too. Stories that are well defined will be prioritized towards the top of the backlog. Stories that are cumbersome and undefined will be held at the bottom of the backlog awaiting breakdown.
If we look at the Backlog as being an ice berg. We all know that the largest part of the ice berg is under the water and the smallest part of the ice berg is above the water. We can compare this to our Product Backlog. Our largest stories are at the bottom and are therefor under the water line and are unable to be worked on. The Smaller stories are above the waterline and are able to be broken down and worked on. Once these smaller stories are completed, more work is brought up from the list, just like an ice berg!
In general, the product backlog is the ‘What’ of the system. They are the functional requirements, non functional requirements and issues which are prioritized in order of importance to the business and then estimated. It is important that the Product Backlog is prioritized and kept up to date frequently by the Product Owner to reflect any changes in business priority effectively.