While I definitely agree that simply making a show worth "Mo Money" is not going to make it any better if it was a crappy game to begin with, I'm always reminded of a scene from the movie Quiz Show, where Martin Scorcese is talking to Dick Goodwin about Geritol's "involvement" in the scandal: I don't remember the exact wording, but he says that this campaign is pointless because the big money quiz shows will come back. Why fix them? Just make the questions easier. After all, people didn't tune in to see some "dazzling display of intellect; they just wanted to watch the money."
Unless the game is already a proven entity, like Family Feud, or is a dating game show, like Baggage, then, yes; I do think it needs to modestly pay out to sell. What do I mean by "modest"? Enough to make people ooh and ahh when someone wins, but not be such a huge amount that it dwarfs the game and makes winning any other amount seem like a loss. Whether this means money, a car, and/or a trip is in the eye of the beholder. If the stakes don't make someone fantasize about what they'd do with the winnings (heck, I'd fantasize about what I'd do if I won $10,000 on Pyramid), I think the show does lose a lot of appeal with an average viewer. Game shows have become synonymous with fantastic prizes, and ignoring that could spell disaster, except maybe in a niche market like cable, like Jeremy said.
/really enjoy British Countdown, though
//I want that teapot...
Anthony