Google does track clicks, but do they use this data to place page A over page B? Proof that they track links, well, I did a search on rustybrick and then moused over the first result. I saw the following target URL, http://www.google.com/url?sa=U&start=1&q=http://www.rustybrick.com/&e=10012 - see for yourself.
So, does this click tracking affect a site's rankings? Many people I meet that are "computer savvy" ask me if Google determines page rank by user clicks. Of course I laugh, but its a solid question. Direct Hit was an engine that based a page's rankings on click data, but that didn't last too long.
In all honesty, does the click data affect relevancy? You have to think so, on some level. Google is probably storing this data in order to do UI testing, relevancy testing and other kinds of testing. So on some small level, one can argue it affects relevancy and possibly a page's rank. But it is known, that clicking on your page in Google over and over again will not shoot your site up to the number one slot.
Forum discussion at WebmasterWorld.