It depends, it can be useful but many people rush into Web Services because it's the new thing and they really shouldn't. Martin Fowler offers excellent advice in his SD Magazine article this month, http://www.sdmagazine.com/documents/s=7897/sdm0304a/sdm0304a.htm.

From the article which is very good advice indeed:

If both sides of the wire use the same binary 
mechanism, an XML interface doesn’t buy you much other 
than a jazzier set of acronyms. If you have two systems 
built with the same platform, you’re better off using the 
remote call mechanism built into that platform. Web 
services become handy when you want different platforms to 
talk to each other. My attitude is to use XML Web services 
only when a more direct approach isn’t possible. 

BTW, are you reading the Randy Ray book? How is it?