This is the most commonly asked questions in many seo forums. Based on the current statistics (May 2007), my estimation is that 80% of seos say that Google PR does not affect its search engine ranking while 20% insist that it does.
My friend and I were tracking a website that was ranking quite well for certain search term. For some reason, the website violated some google webmaster rules and the PR went to 0! We monitored the search engine results closely over 1 week… To our surprise, the search engine results dropped by 1 after the first 2 days it got PR0, then by 2 and stayed there.
We had wanted to do experiment like this but who would want to sacrifice the PR of the website that they loved!!!
Does PR really affect Pagerank? It think it does but probably only by 10%. Because it can be forged, I dont think it can be fully incorporated into the google search engine algorithm at the moment. Google PR is a rough gauge of the reliability of a website which is important. If adobe links to your site, it makes sense to rank your site better in the search engine because your website is considered important.
Any factors that can enable a website to rank well in Google search engine is a big business. If the PR technology is able to fully function, we will get better Google search engine results. However, I think that how to use the technology is beyond the control of Google. There has been alot of debate about this issue in matt cutts website.
In conclusion, personally I feel that Google PR is good but hard to implement in a long run… But having said that, I still like to see the PR toolbar everytime i visit a website.