I have to say I wholeheartedly disagree.
We launched new design templates across all our four Operating Companies' intranets in the UK earlier this year. It was a fairly short project and didn't cost a fortune. The design launch was accompanied by a quick poll where we asked people if they liked it. 172 people completed the poll, and although it was nice to see that the majority voted positively it was actually more useful to read the comments that some people left with their vote.
I divided the comments into categories and its easy to see what makes people tick:
- Colours 34%
- Navigation 6% (considering that the new design didn't alter the navigation it was interesting that some people felt it had improved!)
- Browser 6%
- Other, incl. general well done comments and questions 54%
Intranets are here to serve the business, it's for the employees. Employees are interested in design. So design matters. I'm not saying it's more important than all the other important things (like content and navigation) but it is important.
Rant over.

I definitely agree with you on the design question. People who use websites are not always logical - hence your 6% response regarding the improved navigation! I'm waiting with interest to see if peoples opinions change when we actually put the words "powered by Google custom search" into our search box.
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