Found this this morning. Thinks its a good piece of information about a long time dispute within the SEO community.
Don't know where the original post came from, I can't find it on Matt's blog or anywhere.
Here it is, per Matt Cutts:I've believed this from the beginning. It doesn't take a genius to do a search and look at the amount of times the kw is in the url, but many have said that it doesn't matter.Most bloggy sites tend to have words from the title of a post in the url; having keywords from the post title in the url also can help search engines judge the quality of a page.
IMHO I think Google places weight on it, but that several other factors play into the SERP's with them like registration date, kw density and bl's, and outrank them on a sliding scale.
But its still good to hear this from the horses mouth, considering overall I have several million pages over many websites designed this way already.