You guys are all wrong. Don't underestimate the stupidity of the american consumer. When you are using testimonials even if the reader knows they are fake they still have the ability to do thier intended purpose. nobody wants to buy something that nobody else wants.
Brian, The "stupidity of the american consumer" does not come into play with all types of sales. What would be "stupid" is lumping them all together with one mindframe as though they're one market. There are MANY cases where fake testimonials will kill your business. My specialty is PR, so I'm very well-versed in the image issues that can be tied to outright lies. Getting exposed (and you usually will be, even if not right away) can kill any business that relies on credibility to any degree. Never be stupid enough to lie to your customers. And as I believe Jason's already pointed out here, doing so may even constitute false advertising and be illegal, so don't even think about doing it if you don't know your liability based on where you live.