I believe that your domain name *does* make a difference in search engine positioning - it depends on the relevance of keywords that your domain name contains.
For instance, a new launch I've just thrown out there - Typocide.com - is at the top of the google search for 'typocide' after only a couple of days. It's an obscure keyword, sure, but it's not the only, nor is it the oldest, submission on the web using the same word. It is, however, the most relevant.
Now, I'm not an SEO expert by any means, and maybe the Typocide site is a bad example - but I've had other sites that seemed to have far better ranking when the keywords are as appropriate as possible to the audience you're trying to reach.
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