I think they're VERY important in regards to the quality and level of the music. Simple music can call for simple lyrics, and more complex music (i.e. concept albums, rock operas, thematic albums) can call for more complex lyrics.
I think good ideas that turn into good lyrics can sound great if backed by great music. Rarely do I feel that good lyrics are found with bad music. It tends to be the other way around - bad lyrics with good music (as some might say is the case with DT's "The Count Of Tuscany", but I've actually grown to like the lyrics BECAUSE the music is so good!).
One case for me is Neal Morse's lyrics since he left Spock's Beard. As someone who doesn't really believe in Christianity (anymore), it took me awhile to get used to his new lyrical style and presentation, but his music is just so damn good, I've grown to accept them as just another lyrical subject matter (much in the way Jon Anderson used Eastern philosophy and religion as a basis for some Yes material) that Neal has decided to use, albeit in a more direct manner. One song in particular, "King Jesus", is so overtly Christian Rock, but musically speaking it's one of Neal's best rock tunes and I love playing it full blast in my car while spinning One.
In other artists, though, sometimes the lyrics do have to be intelligible, and smart, and not simple "love ballads" or "hateful screamers", but there's a time and place for those as well. For the music I listen to most, I think the lyricists do a GREAT job in conveying what they mean and put it with music that matches it so well.
So in other words, yes, lyrics are VERY important, especially when it comes to making or breaking the music behind it.
-Marc.