PhD school is ranked lower than undergrad

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I am an undergrad at a pretty high ranking university, my GPA is acceptable but not phenomenal, and my research history, while it's there, is not phenomenal either. I don't think I will be able to get into a PhD program anywhere close to the ranking of my current institution. But I do want to do PhD because I enjoy research.

For job prospects after PhD, how true is the idea that my last institution is the most important one, and if it is significantly worse than my penultimate institution, it is seen as bad?
 
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You are talking about job prospects for being a professor? In that case, I think many have come from higher ranked universities.

For industry jobs its probably more important that your research is relevant to the industry.
 
Generally, no, it won't be seen as "bad". The things that really matter for prospective hirers in academia, more so than what institution you attend(ed), is your grades and research.