I agree… Short term you may see some sites come and go in the rankings, but if you focus on great content and great links you will be there in the long haul. Sure these fluctuations suck, but if you have some solid links and content worth linking to you should be fine.
I have also seen some whackjob sites ranking for good terms lately, but upon checking out there backlinks I see they are just blackhat spam sites that spam blogs and forums.
So fwiw good content is important if you plan on being here for a while. Links are also important, but what is important about links is where they come from. I remember Marcus Tandler saying in Cyprus that your site’s link profile is important. ie if the majority of your links are of low quality then you can count on your site not ranking much if at all. He also said (something like) the more high quality links your site has the more low quality links you can get away with.
What I took from that was it’s about the ratio of good quality links to bad quality links which will determine overall if your site is worthy of ranking highly in the serps.
Google could be giving a new site the benefit of the doubt when ranking it, only to drop it’s rankings later on once it has determined that this “new” site’s links are mostly low quality/spam. This could also explain why some new sites shoot up in the rankings only to fall a few days/weeks later.
Content is king in the sense that it takes some REALLY good content to get some REALLY good links.
sorry for the huge post, that’s just my interpretation of the situation