It depends on so many factors, like if the banner attractive and well designed, the banner location and even if the banner gets good traffic.
I run a free 1 to 1 ratio banner exchange and so far in less than a month from 33 sites over 95,000 banner exposures have been created. The click to impression ratio isn't great but that all depends on the banner, who it appeals to. You need a good striking banner that will make the viewer want to click it, you also need it to be displayed to the correct audience, common knowledge really! My banner exchange offers categories so that your banner will be diplayed in that category matching website on the network. Also the 1 to 1 ratio means that you get an exposure on the network for each impression you create. I'd say its worth a try, not just because I own the site but also it's free and if you don't get any traffic you still get 500 free exposures even before creating any impressions. All you need is a 468 x 60 banner. sign up - click here stats - click here top banners - click here
Of course it still works... It always will and will be around for as along as Internet Marketing still exists.
In my experience, banner advertising is wildly successful ONLY if you place your banner on a popular website that is dedicated to your product. This way, your visitors have already been pre-screened. Also, your banner needs to speak directly to your market. A banner targeting first-time homeowners would use different language than a banner for web developers. I like to use "insider" language, it makes people feel included.