It's quite accurate! ie: more accurate than Amazon's "You might like..." attempts.
I typed in 'Built to Spill', it returned with 'modest mouse' and other goodness. It also came back with "Death Cab for Cutie", who I think are rubbish. So whatever magic gnomes power the site and read our minds aren't completely infallible.
You can confuse them into guessing. I made up some band names such as "Kak Fountain." "Clotpipe" and "Eggy Jesus" - whatever - they are just placed around bands that have similar sounding names. If that truly worked then I'd own albums by 'Slayer' and 'Leo Sayer'.
...Which I do... so maybe it does work, after all?