Reviews as far as I've determined do not DIRECTLY affect ranking, although previously Amazon's A9 may have taken them into account. Reviews however greatly assist with conversion rates (via social proof, additional imagery and hopefully convincing descriptions in use) which DOES affect ranking. They may also indirectly help with Google's keyword ranking of the listing page.
Persoanlly I'm overjoyed Amazon has advanced their position on 'honest reviews in exchange for test product' to one of non-compliance. It was undermining the entire trust of the system to consumers. Reviews are essential in the overall scheme of growth, but more important than anything is the value proposition and your competitive differentiator. Reviews can still be easily garnered by utilizing your own email list on launch products, using Facebook funnels, doing contests, family friends etc., and email follow up (word of note, as of this writing word is Amazon is testing the elimination of any follow up emails which mention reviews. I've personally changed my follow up sequence and will not be surprised if this becomes a TOS violation. Amazon customers are inundated with email spam and the customer experience is degraded as a result).
My very first product was a success, but it was validated more or less on eBay before I brought it over to Amazon. There were many other products I passed on after sampling.
I changed my username, this was a reply to my post. Thanks for that, I'm also glad they cracked down on the reviews especially as a consumer.