Yes, it does work. What is good about PR is that it's viral. You can submit it to different PR directories, and readers from different parts of the world can read it and even repost it in their own site or blog. It's a form of viral marketing/ site promotion.
Press Releases work WONDERS! I get releases on Google all the time....After I do my usual Press Release Submissions, I take them and submit them to the social sites as well...instant traffic and backlinks!
I think the effects of a Press Release are really determined by your industry. If you have some sort of online services/online business, PR are pretty worthless. If you have a truly innovative/new idea you will get a lot more out of it. If you are releasing articles for reasons of SEO, you are pretty clueless, as I have yet to run into a PR site that actually gets listed in Google webmaster tools.