The cover letter is the most important part of any job search

I disagree. I think the most important parts of any job search are attitude and aptitude. Some background: I started looking for a new job in early February of this year after the company I previously worked for shut down. At first I was worried that with the recession it might take a while to get new work so I got very serious about my new "job" of finding a job. I found one 3 weeks later without any connections (via craigslist) and I'm pretty sure it was because of the effort I put into:

- ensuring my resume would appeal to the kind of people I wanted to work with

- ranking and filtering position postings into categories based on how well they matched the kind of work I enjoy, the kind of work I'm currently good at, the salary I wanted, future opportunities and general working conditions

- writing specific cover letters explaining my background, my understanding of what the position required, why I wanted to do that job and what kinds of things I would do when I started.

- spending time preparing for interviews and studying things I believed it would be worthwhile to demonstrate in person

- ensuring my references were fully informed about my situation, understood my view of the companies I was considering and were easy to contact by potential employers without delay

When I started my search, I screened around 100 postings down into three 5-element lists (A/B/C) and sent a custom cover letter and resume to the top 10.
This led to 4 interviews and 3 offers in the next 3 weeks and although I had to turn down two of the offers, I've kept in regular contact with them and have been asked to keep them in mind if my situation changes. I'm pretty certain that every one of the things I mentioned above was essential in this outcome.

Ironically for the past month I've been spending a few hours a week where I work screening and ranking resumes, conducting telephone interviews and making recommendations to our management. Although I'd prefer to be coding during this time, I know from experience that I'll be much happier in the long run if I help the company pick good people. So far I've been applying the same criteria I would want applied to me and before I agreed to do any reviews I made sure that my boss and our HR person agreed to:

- 5 specific responsibilities for each position

- 8 short questions we would send the candidate before we talk to them on the phone

- A 20 question, 45 minute written exam for in-person interviews.

Regardless of what their cover letter says, the first thing I look for is whether or not the candidate's experience and background is appropriate for the job. About 1/2 the candidates are immediately eliminated without a thought. Then I look more closely at the details and read their cover letter and assign a number from 1-3 for each responsibility indicating how well their stated experience and goals match that responsibility and record the details in a spreadsheet.

The top 1/3 of the candidates get selected for followup calls. When the call is scheduled, the candidate is emailed the questions we'll cover related to the responsibilities. Although technical in nature, none of the questions have right or wrong answers. They are intended to give the candidate an opportunity to demonstrate their ability to understand our company's goals and explain how they would fit in. Although the phone interview is limited to 20 minutes and candidates have to be clear and to the point, they are also offered the opportunity to follow up with anything they would like to say in email (although surprisingly few do so). So far only about 1/3 of the remaining candidates have been asked to come in for the interview and written exam and we've been pleased with all the ones that have.