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Granted, when you follow thousands of people this doesn't work well ... but for a few hundred it can help.
I've about decided that by its very nature, Twitter is mostly a spam platform. Oh, you can yuck it up & chit-chat with some people, but most of the hardcore "pro" Twitterers are only there to use it as another means to plug their blogs, Facebook, FriendFeed, LinkedIn, or some other social network - or to promote their services.
And I've done my fair share of promoting new posts on my blog on Twitter - and there has (thankfully!) been a small uptick in site traffic as a result - but I'm not sure that the meager return merits the time I've put into it.
And just as with so many of the blogs you'll come across, the Tweeterverse is rife with metaTweeting - Tweeting about Tweeting and often those posts don't really offer any value or enjoyment.
The single most productive thing I've done on Twitter has been to discover a couple of dozen other users in my own geographical region, many of whom have their blogs listed in their profiles so I've been able to expand the list of area bloggers that I keep on my site.
3 or 4 passes of this exercise will (usually) render you a really interesting stream full of relevant content.
Many people I know take the usual (and in my opinion slightly dull), approach of only following / being followed by 'people they actually know'. Personally I cut those people out of my feed as they can be dealt with on Facebook, and are less likely to pump interesting content on to twitter.
But I agree with you that there are far more powerful things that can be done and look forward to reading more info from you on how you get on using Twitter