Out of the box its quite poor, however by performing a number of hacks it can be made in to a great performing platform.
I love wordpress. Out of box is ok, but just a few plugins can make it great. My post on wordpress plugins to SEO your blog might be of some help to you: http://www.freezinghot.com/index.php/20071215/top-wordpress-plugins-to-seo-your-blog/
Wordpress 2.3 + All in one SEO plugin + Good permalink setting (/%category%/%postname%/) + XML sitemap generator + good ping list = Superb SEO blog.
I agree with Sxperm , making this combnation gives you a perfect SEO site. I am using this combination and it really rocks