Graphics matter a lot in simulations. But that's because they are the only kind of "game" solely designed to emulate the real world.
Outside of those, graphics matter much less and game mechanics are more important.
Presentation still matters though - you can destroy the best of games, by being bland in your presentation.
It's much like board games, actually. A good board game is based on its atmosphere, the competition between the players, and the different, but equally viable strategies. If the game pieces or map or cards aren't adequately illustrated, the game does become less enjoyable, because it loses some of its soul.
In a computer game good graphics can make for better atmosphere, but sound is almost equally important, and in the end graphics design often trumps pure geometry performance.
Of course, in computer games, game design has been basically shelved. Very few new concepts have been shown in the last few years, even less so by big studios.
Some concepts were ruined by weak presentation (spore? :awe

, others were made by having their own flavor to presentation (mine craft)