Pull ups
 

For your back what way will be more helpful in back development. Palms facing in or palms facing out. Or doesnt it matter though when I do palms facing in I get more reps and feel like my biceps got a better workout along with my back.

The pull up machine at my gym says that palms facing in are good for your back.

Arnie's book doesn't even mention the palms-in grip (what I'd call a pull up). So, I guess, palms out would be better.

I prefer palms out so my biceps won't dominate the lift.

Here's a good routine to try using both:
http://bodybuilding.net/showthread.php?t=803