Yes, Digg still supplies strong backlinks that greatly effect your SERPs. And if you can get on the home page, tons of traffic.
@CrimsoniteX: You might be behind times Digg doesn't supply backlink anymore. Even if you feature on first page. The only value I see from digg right now is a permanent low quality link with chosen anchor text and it's a good platform to launch potential linkbaits.
I think Digg is great, I got my site indexed in a couple of days by simply submitting my site to it. Got some fairly good rankings in google aswell.
Digg and other social bookmarking sites are treated as any other sites when it comes to backlinking. So getting a backlink from sites like Digg is pretty good and it helps you to get good SERP rankings.
Digg is still good for traffic even though I have a few who said now getting on the front page isn't as great as it used to be. I guess the terrible CTR's have gotten even worse now that the DiggBar is in effect.