SERIAL is just shorthand for creating a sequence, and then using that sequence as the default value for an INT4 column. If you use the command-line tool psql, you'll even see that it tells you that's what will happen.
So: all SERIAL does for you is get an automatic unique number assigned to the column when inserting a new row (provided you don't supply one of your own with the INSERT statement.) Other tables that want to reference this number should use INT4 as the data type, and you still have to explicitly say PRIMARY KEY if you want it to be such.