FYI, it's pretty easy for a knowledgeable thief to disable the firmware password on PPC Macs. There has been some debate as to whether the method works on Intel Macs, but I have seen statements saying that it still works even though Open Firmware has been replaced by EFI.
That said, most thieves aren't so knowledgeable, so yes, it does provide a fair amount of protection. And since thieves very often fence their stolen goods without even turning them on, you have an even better chance of catching the clueless sap who ends up with the machine.