I'm an avid user of Yelp and find the overall ratings to be usually quite accurate. The caveat, though, is that the restaurant/business needs to have a sufficient numbers of reviews so that all of the top and bottom end outlier ratings are negated by the overall average score.

Also, keep in mind that the ratings are based on the complete experience not just the food. If someone had great food but a bad experience with the waiter, they may have no problems leaving 1 or 2 stars. Crap food with awesome service could get 4 stars.

It's Yelp, not Zagat or Michelin. If you use it appropriately, it will work for you.