The other thing is SMM is a great tool for maximizing visibility for content.
More eyeballs on your content = more people likely to link to your content.
More links of course = better SERPs.
The key, therefore, is to consider both SEO and SMM when creating content. So, as an example, you get developed a silly but fun little flash game. The SMM has ensured the branding is all over the page, and as an SEO, you've ensured the technically geared with keyword links back to the main pages your trying to get up in the SERPs. The SMM tweets it out to your built up list 10,000 followers. 5000 visit your site. 50 of those visitors are also bloggers. 10% of them put a post on their blog.
So, in this example -
Total traffic generated from Social Media - 5000 visitors
Total SEO value = 5 good quality backlinks.
Also, your kidding yourself if you think Google hasn't built a whole separate algorithm for the major social networks. They're monitoring them - see, for example, the Twitter inclusion in certain Serps. They're not just going to put the resources into gathering a dataset that size only to then ignore it.