The basics of everything stated by Smallaxe and Dave Stuart are true concerning both aeration and slit seeding. I agree that the main function of aeration is lawn maintenance.
With that said, I can state that it is a fact that aerating and over-seeding to help thicken a poor to decent stand of grass does work given that whatever the cause for the weak stand of lawn is addressed and corrected. I say this as a fact with confidence because I have done it multiple times over the years. This includes success this year with what appears to be a very good germination rate. This also recommended by the Ohio State University Extension Office. http://ohioline.osu.edu/srt-fact/0002.html
Now, I am not arguing that this is the best method to germinate grass. I am just saying that it is a tool that we have to help improve a lawn. It works. I know because I use it. I do several lawns a year and most with success and even better without irrigation by the home owner because of the time of year that it is typically done. The plugs and holes DO provide soil for the seed to have contact with. Also, typically where the lawn may be very thin, I will double or triple aerate the area, seed and then drag a couple times with a rake and always get pretty good results as well. It is a quick and easy way to improve a lawn.
My only question, that I wish I knew is, what is the germination rate? What percentage of loss of seed is there? And how late in the year does this worsen? I see my best results with the lawns that are done earlier in the "aeration season" (for me late august until late october considering enough soil moisture to do so) I use a 50/50% blue/rye mix from late August to later Sept, then switch to a 75/25% blue/rye, then to 100% rye around the first week of Oct. I always prefer to over-seed earlier in the year, but you all know we get the calls much later than any of us would recommend for over-seeding, in which I do my best to educate the customer.