I have done a little bit of research on this and every page that I have come to, be it a forum, blog or
SEO site, all state that your title attribute for text links has no
SEO factor to it. I personally disagree with all of them. I use title attributes for my text links, and when I look at a text only cache page of mine on Google and Yahoo, the title tags have been indexed and still appear. This tells me that they play some part, but I have no idea to be honest of how much weight is actually put on them. Alt tags for images, Yahoo does put a little bit of weight on these to help determine page relevancy, but if you are only looking at putting the title attribute in just for
SEO reasons, I'm not sure what type of payoff you are going to get. With that said, I would still put them in, not just for
SEO reasons, but for accessibility reasons. Different user agents and audible readers use these tags. The title attribute should really be used for, as stated by W3C, "The title attribute may be set for both A and LINK to add information about the nature of a link. This information may be spoken by a user agent, rendered as a tool tip, cause a change in cursor image, etc."
Basically in short, Yahoo and Google do index them as one can see by viewing a cached page in text only, so that tells me that they do play a small part. How much, I do not know, but I feel you ought to use them, if for no other reason use them for accessibility.