I've not traditionally been much of a Twitter fan,
I've increasingly found, however, that Twitter serves a useful function for me, fitting in between blogs and instant messaging as a "micro-blogging" tool, as Glyn Moody suggests. It's also a way for me to IM multiple people at once, without any near-term expectation of response. I now post to Twitter quite often.
Despite these benefits, the only way I've found to make Twitter work for me is by limiting the number of people I follow. I follow fewer than 20 people. These are people (or companies) I know well to actually care about what they think and what they're doing.
There are other people, of course, whose opinions matter to me, but I just can't follow them all on Twitter. I'd never get anything done. Because Twitter can be so noisy, I think it's critical to limit the signal-to-noise ratio, and the best way (for me) is by limiting the number of people whose updates I receive.
I don't understand how people can follow 100-plus people in any meaningful fashion. I also don't understand why anyone except close acquaintances or friends would care what I Twitter, as much of it isn't open source-related.
For me, Twitter has become a great way to stay in closer contact with people I already know, and to add context to my blog entries. But that's because I limit the noise.
But maybe you've found alternative methods that work better for you?