One quick question.

Depends on the situation, but basically it can, but other factors can rank other sites higher too so its really not too much helpful. For example i could write a simple blog post on Hotel Vacation dinners on a PR6 blog, and rank higher than hotelvactiondinners.com :) with zero links to it.
 
It definitely helps a lot. I have sites with only one or two backlinks (and the backlinks are on the same server IP) and the keywords in the domain name and guess what I'm number one in google, three in yahoo and one in MSN for those keywords. Of course they aren't the most competitive keywords, but there are still millions of results when you type them in. I've done this a million times and I've always had easier success (usually in MSN more than anywhere else) with sites where the keywords were the domain name.
 
Yes it can help but if your niche is highly competitive it's hard to get the top spot. Don't forget inbound links and content.
 
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