I don't think my school is that competetive per se, but we do have an old system with even some single letter or very early (national) chapters. In my experience here the recs helped me out in differing ways depending on the chapter. For various reasons I did not go through formal, so keep that in mind.
1) For chapters that took quota during formal, are at total, or just aren't doing COB, the rec has worked like getting a foot in the door. They can't take me now, but they are aware I exist and when they want new sisters, they have someone to invite. In my opinion a chapter that is always looking for potential sisters, even if they can't take any, is one that has good recruitment skills. Can't hurt to have a pool of potentials when it is time for new members.
2) For groups that did COB having a rec helped. For some groups I had alums contacting the chapter for me and saying I was interest in COB, and them working as a go between. Others it was that they knew I didn't go through formal, and looked me up in the student directory.
3) Sadly two groups I have a rec for won't take women until next fall.
Having the rec would have been great in formal, and now knowing some of the members wouldn't hurt either. However, there are LOTS of girls with recs that come through those chapters, so it doesn't make the same impact as with others.
Recs for me were a matter of introductions for me, and a networking tool (and a really nice thing for alums to do, I cannot say enough how flattering it is when people think you're good enough to maybe be their sister one day). I know once I meet the chapter I am on my own with my own merits and social skills. I do think they are great for some women who can have their achievements, skills, activities, and so on highlighted to make the sisters aware of it. I am rather gregarious and social, but for a shy person or one not versed int he greek system, it may have made a real difference.
P.S. You GCers that helped me procure recs, thanks yet again!