Web 2.0/Social Media - is it relevant to all businesses?

I've just created a new Blog Carnival today with a very tight deadline for the first edition. The 2.0 (as in Web) for Business carnival focusses on all things social media - blogging, wikis, podcasting, vodcasting, myspace, linkedin, ecademy, youtube - and why it's important for businesses to get involved with it? The first edition addresses a specific issue which comes following a conversation with a friend (we'll call him Tom) who works in a web dev co. This is his conundrum:

"We are a technical web consultancy. We deliver business-driven web solutions to SMEs across the UK. Increasingly our clients are asking us about Web 2.0. They're worried. Some of them want to 'upgrade'. They are affected by the considerable hype and don't want to get left behind. We tell them that Web 2.0 represents an evolution not a revolution and that many of the incumbent technologies and societal paradigms have been around a long time, but are only recently finding widespread traction.