Funny enough I was just reading a recent article on forbes on this topic. You can check it out here: http://blogs.forbes.com/marketshare/2011/01/23/why-the-news-release-is-worthless-in-todays-social-media-age/
I think that having a solid social network and using places like HARO, you are going to get a much better response for the effort you put in. I think some of the cases where this can still be effective is when you have a really good newsworthy story (not a sales pitch) and an exceptional title that will not be jumped past by potential publishers.
As for a company to go to for pr's I have used prweb with good results in the past, but rarely use them anymore as we find HARO, MyBlogGuest, and building strong social networks to be far better performers.