From everything I've read (and what little I've experienced) the type of wood used affects a lot about the sound of a guitar. This is readily audible in acoustics more than electrics. The various woods selected will affect how rigid the neck is, how much sustain it will have, how well it holds tune, how the pickups react to the strings, and apparently a lot of other subtle things. For example, I'm really impressed with the way Ibanez uses a five-layered neck on many of it's bass guitars. This allows them to be thinner (faster) than many others, yet still very rigid.
I posted a link a while back to a wood database site, and have really enjoyed reading up on them. While some are dense / hard and seem suited for instruments, they're often oily and hard to work with, hard to glue, etc. I've been told I'm hard-headed and hard to work with! (hyuk)
http://www.wood-database.com/
For example, I've often wondered why "Verawood" (a.k.a. Argentine Lignum Vitae) isn't used for fretboards, as an alternative to ebony or rosewood. It's relatively inexpensive, plentiful, good to work with, and much harder than either of the other two. It's ranked at 3710 on the Janka hardness scale, while African Ebony is at 3080, and Brazilian Rosewood is at 2790. I understand that the harder the fretboard, there's more sustain and a cleaner tone.