Yes I believe PageRank is still the most important factor for site ranks. But NOT the one showed on google toolbar.
I think PR would need to be replaced, not removed, a better way to rank a site by looking at both traffic & links would be best
Alexa ranking is more meaningful than Google's PageRank. I don't care PR too much because it fluctuates more frequently than Alexa ranking. PR is important for only the sites which are PR6-PR10. If you don't have budget to buy an ad from a PR6-PR10 site or if you don't own a site which has PR6-PR10, you should not care about PR.
Traffic and pr is connected. If you have a good pr then you would get lots of free traffic from search engine.
Actually PR is not that important as it was in the past. IMO its best to have quality sites that are built for users and not search engines that are further boosted by SEO activity.