It is one of those "necessary but not sufficient" items. Letters of reference, volunteer activities, GPA, MCAT scores, even extracurricular interests, are all considered, as is the letter that accompanies the application. The latter, though, often are seemingly cut from the same cloth "I want to help humanity" type stuff. Each of these is necessary, but none alone is sufficient to get an applicant into med. school. The competition is so stiff that most have a 4.0 GPA and a score of 28 at the very least on the MCAT.
Mott is right about the insane costs of a medical school education. Remember that article a couple of months ago about the family practice physician who had racked up about a quarter million in debt for her med school education, then stupidly let it slide during her residency and now owes around $550K? Not long after I joined the board years ago, I wrote about the relative costs, without the numbers, of a med. school education in Canada, specifically Ontario. Granted, the salaries when compared to here are not as high, but it's possible to get through with minimal, or even no debt. The selection process is more rigorous, but that tends to produce a class that really wants to practice medicine, with less eye on the huge salaries that may be attractive in more ways than to repay the costs of the education.