I agree, although no truly great product is made in one night, hackathons can lay the foundations or the idea for something great to be elaborated on. Very few times do people get together, outside work time to build something, just for the sake of building something. Its important to give this time.
I think this is spot on, I doubt the actual code written at the event gets much use afterwards but the connections made and the teams formed can go a long way.
Our startup (www.stylegauge.com) began at London Startup Weekend 2011 and is now a few weeks away from launching trials. The codebase has changed completely and the ideas evolved a lot but it was the hackathon which got it going.
