For the last couple of years my mobile home repair site has been on the first page of Google results for the term "mobile home". That changed with the last update. I can see several factors involved, but one I did not anticipate was seeing Microsoft near the top. Can we say "Windows Mobile Home". Three of the top ten results are now about phones.
I had slashdot beat me out of a good keyword a few months ago with some article they posted (how to make a hard drive wind chime) - they of course, were #3 for wind chimes for a good month before it disappeared. The power of a lot of links is amazing. you can rank for about any keyword you want. I love putting up a page and almost always seeing it top 20 within a few days with little effort to make it top 10.
Doesnt has to be like that. Good intern links can do wonders as soon as your front page has enough backlinks to it. I often wonder why people do so much trouble getting their front page to rank #2 instead of #3 when they could, for the same amount of work, make 100 new pages rank #5-10 easily by just adding more pages.
I completely concur - adding a few pages on a frequent, regular basis has a great affect on your SERP effectiveness as long as the pages are relevent, have clean code and are internally linked well with other pages. However, do not add too many pages too fast. If you entire site only has 50 pages, adding another 10 all at once may raise a flag with some SEs.
I don't believe that increasing the number of pages would have any problems with the SE's. They don't discover all new pages at once, often they don't find some pages for a couple of days or even weeks depending on the crawl schedule for that site. I've increased sites from 100 to 10,000 pages over night without detriment. For a coporate client, I've seen pages increase from 700 (or so) to over 50,000 without any obvious penalties.