Social media is the latest and most advanced form of lead generation available today. Most people who use Sm do it wrong by just spaming the world with links to products and services. This turns people off and most remove you from thier fan base in the blink of an eye.
I run a small independant online business and Social media allows me to find new potential customers for my products. But I also interact between promotions that helps to build trust and a solid relationship with my followers and my friends etc.
I use Twitter, Facebook and my blog to grow trust, a relationship with my "Fans and Followers" and to find new ways to promote my business.
Social media is free to use and as such its priceless in the return on your time for each new customer you find for your product.