There are two basic ideas that Twitter pundits are focused on. The first is that Twitter is the centre of a universe of real time updates that will drive the engines of real time search. This is enabled partly by the behaviour of users and partly by the low latency publication and consumption mechanisms of the product. The second is that Twitter is just a load of "pointless babble" and just a waste of time.
The most surprising thing about the second point is that the pundits who write about that are simply saying that they don't understand Twitter - as well as a good chunk of social media and social networking in general. This article from the BBC 'Twitter Tweets are 40% Babble' demonstrates a shameful lack of analysis. It is based on the Pear Analytics study of a very small sample of Twitter data.
Fortunately, danah is on the ball enough to bring clarity to the situationby uttering the magic word - 'phatic'. If you're interested in a bigger picture, you should read Dunbar's Grooming, Gossip and the Evolution of Language in which the idea that language evolved to allow our ancestors to interact socially with better scale and distance (language - or gossip in particular - is has the same social function as pulling nits out of each other's matted hair).
There's another angle to this story that interest me - it suggests that most of the data is of the 'I'm doing this right now' type. That type of thing may be literally useless to someone not in the author's social group - the intended audience - but the value of this type of thing in aggregate is high. So where are the killer products that leverage this? If they exist they are hidden from the users and are being used to drive ranking functions and content discovery in search engines and the like. But what would it be like if this data mining were exposed to the public. Twitter trends gives us the thinnest possible idea of this.
Is there really a dichotomy here - between the pointless babble and the soul of the new real time machine? Probably not - given the volume of tweets, percentage-wise you don't need too much to get what is needed for the real time stuff.