Others have mentioned that there are different definitions of what "design" means, but I will assume you're talking primarily about visual/graphic design more so than the other ways the word is used.

As designers/developers or creative people in general, it's natural to think of our creations as art, they are.

But when it comes to art that has a concrete function, like websites, I find it helps me to remember that the average user will not be coming to a website I build for the sole purpose of marvelling at that lovely gradient that I made or that Ajax UI element that took me hours to put together. They're coming to the site to use a service or obtain information. That's all they're really interested in.

I'm not trying to say that the prettiness of the site doesn't matter, it does (for some sites more than others). But it's secondary to making sure the site is usable/accessible, making sure the visual design doesn't get in the way of what your users are trying to do. I'd also include in this making sure the design conveys the image you're tying to get across. That's part of the design not getting in your users way.

Users by and large will not squint at your visual design like you do and critique it in anywhere near as much detail as you might.

I think the term 'design' can be misleading as it has a few connotations. If you think craigslist or drudge report, you can say design doesn't matter because, they are ugly sites. But there are lots of sights that have nice colors and images but aren't usable.

I couldn't find a link to your site, so I can't figure out where you fit in.

For design, go usable first, then dress it up. like building a house, foundation, make sure the door is in the right place, you've got a nice driveway, etc. Get a site people can look at. Then add the layers of 'design'.

Take a look at apple.com (the mac page is probably better than the home page for a comparison http://apple.com/mac). As usual via their minimalism, there is a ton of design, but you almost want to click on stuff. Compare it to linux.com, less enticing, then try microsoft.com.

I personally fall victim to overloading people with content, and not giving enough direction. Less is often more.

It matters a lot to me. I often hit the back button within 3 seconds of the page loading. The information needs to be cleanly presented and the site needs to look credible.

If design is tantamount to usability, it is the second most important aspect of your site (behind functionality, in my opinion). If design = drop shadows and rounded corners, I would put it on the bottom of my priority list.

If you look sketchy, why should I trust you? Your friend can use Lynx if he doesn't care about Web design.

I matters much more than you think.

look at myspace. I mean, design matters in the sense that you need to be able to do what your users want to do, but no, rounded edges don't matter.

really just depends on what type of product you have at your site. if you are selling your design skillz, obviously you want the site to look nice, but clean and nice doesnt necessarily mean fancy shmancy.