If the pages are severely broken, such as having multiple <head> or <body> tags, it could conceivably affect crawlers ability to determine what the page content really is, and thus indirectly affect ranking.
Other than that, however, W3C validation is considered by most not to be a ranking factor at all, and many of the world's most popular and highest ranked sites don't validate.
Validating pages can be sort of fun, and it does give you some confidence that your pages will look basically ok in any browser, but if you're considering embarking on a massive validation campaign only because of an expectation that it will improve ranking, I believe it is wasted effort.
The same used to be true of Flash content, but there are recent reports that Google is going to start trying to read Flash.
[edited by: SteveWh at 10:36 am (utc) on July 13, 2008]