If I go to a website that's number 1 on google but has a shocking design I'll click the back button very quickly.
And thats what i believe is one of the major features in the new Google Algo, "Framers Update" or "Panda". I believe bounce rate and time spent on the page are a huge part of this.
Hence, if ugly and people bounce, it will weaken serps. If a page of garbage, but looks pretty and delays the bounce, then it strenthens serps.
Only my opinion and looking at lots of the garbage ranking hish in the serps for certain phrases, seems to support my thoughts.
Perhaps some of the real SEO Boys can enlighten us with their thoughts?