buckworks - 1:24 am on Nov 24, 2011 (gmt 0)
I have no idea whether there's truth to that rumour, but even if true it would only be a tiny factor among many other much larger ones. So don't expect any measurable SEO benefits if you extended your registration.
That said, there's no logical reason to expect it would hurt, and there are practical business reasons why it's a good idea to keep your domains renewed well into the future.
I keep most of my domains registered at least two years into the future, and the important domains are the full ten years.
I make a lot of decisions on the basis of "It can't hurt!" and that's one of them.
One of my other mantras is, "Never pass up an easy chance to do something better than the other guy."