I don't think it is a factor to rank your website. But if you want a successful website you should have a fast web server.
As of the recent google caffeine updates done by them they are implementing many changes in there ranking algortham. One among those are the page loading time. As we are in the 21th century and we can not afforded to place site which are slow at the time of loading the pages. So this means they are taking this point also into conseridation. So hosting servers has a lot work to do as per there performance and also there packages.
yes! page loading is a part of SEO. optimazing the graphics for a better user friendly experience. use JPGs instad of bmp and if you have transparency you can either use gif or png, I personally use png but this is personal choice. it is recommend that the graphics shouldnt be largen then 20kbs.But maintaining a stardard quality. Images speaks for 1000words, so you should have some images, just do not overdue also I dont know if you are using tables, if you are then use an externall css file. This is shrink the code making it little more faster to load, every little helps. hope this helps.
Yes, Site Loading times affect sites ranking but if it's taken 0.60 seconds then. otherwise it's one of that factor that can be issued for Ranking.
Performance overview On average, pages in your site take 10.5 seconds to load (updated on Dec 31, 2009). This is slower than 93% of sites how can I do？i cannot delete flash filesï¼
Indirectly it can effect it because if your page loads to slow - you will have higher than average bounce rate. A high bounce rate tells Google what... maybe that your page isn't as relevant as your competitors.
If Google includes a "Site Performance" feature in it's webmaster tools, it must be important. If it does affect your SERPS rankings, it wont affect it as much as other factors would, such as url, links, content, and titles. There are many websites out there that have slow load times but still hold the #1 spot on insanely popular key terms. Google has always been stressing the fact that you should design your website in a way that's friendly to the user, rather than search engines. Search engines, especially Google, set their ranking factors based on user experience, which means, if you concentrate on making your website user friendly, you should do well with the SERPS.
Was unaware that page loading time was a factor, so it's really helpful to know the above info. I don't think it is or will be a significant factor though, so I agree with xpirtdesign on this point. Nevertheless, will definitely take all of this into account further on, and will analyze my existing projects for this issue. And everyone else better do the same to avoid any problems because of poor hosting service or heavy site design.