A few quotes from In conversation with... Daniel Dulitz - Google Engineer.

people are just casually surfing the web they can see
what Google's PageRank impression of that page is. And
that's great. I'm all for people doing that. But for
search engine marketing, search engine optimisation
purposes, yeah, I'd say that there's too much emphasis
placed on what that PageRank number actually is.
Our job as a search engine is to return the best results
that we can. And we're not naive enough to think that we
can condense every indicator about a page into a number
from one to ten. We certainly can't do that. So, if people
are trying to look at what we're doing and their idea is
based on that single number from one to ten, then ...
well, they're not going to be effective in figuring out
what we're doing at...

I think part of the problem also, is that people are
fascinated too much about what kind of rank they have at
search engines – regardless of whether it's any use having
that rank. You know, whether it brings them any traffic or
not. And those issues seem to become just so important to
them. As far as I'm concerned, I get a better idea of what
traffic I'm getting, and from where, just by looking at
log files – not by doing a rank check to see if I'm still
number one for my own name spelt backwards...

...Much more important than checking your rank on search
engines... In fact, I think THE most important thing
you can possibly do is track conversions of users who
visit your site – and to track that by referrer – yes, as
you say, to analyse your own site logs.
Then you can work backwards from there, you can see what
referrers are doing a good job for you. Are these
directory or links from other sites providing a lot of
good traffic AND are search engines providing good
traffic. And then you can look at changes in those
relationships. You can detect between yesterday and today
that there are fewer conversions from, say, Alta Vista
than there used to be. Then you have a real live person
case asking the question...

Mike G
So, as I said, you can learn a lot more about your success
from your log files than you will doing a rank check for a
keyword or phrase, which even if you're number one,
doesn't convert for you...