Having IT understand what business' goals and objectives are is a very worthwhile exercise in my experience. Listen carefully, and you stand a chance of actually bringing your knowledge to bear in a valuable fashion. However, the incessant "IT must align with business" meme currently being propagated by the industry pundits (the so-called "thought leaders", highly paid consultants, and analyst firms mostly) is starting to wear thin.
I can't write a strategy that dictates the direction of things that are expensive and hard to change, like tools, platforms, applications, and architecture, based on some business dude telling me that next year we're going to leverage key learnings in our core competencies and maximise customer value by augmenting synergy in the value chain.
I think a lot of what constitutes "doing IT well" is figuring out what to prioritize. There are always so many competing things to be done (every one as important as the next), and never enough resources. Listening to the business helps guide the prioritization process. But the other thing to do is to keep your backyard clean. What I mean by that is not allowing the weeds to run over, as it will invariably slow down your other initiatives. You need the ability to make sound judgment calls. If you can do it right, you can respond nimbly to the latest and greatest business direction change.
It also strikes me that this should work both ways, in a "hands across the water" kind of way. Business can help itself by understanding some of the constraints under which IT must operate, as well as keeping up with the latest creative innovations. Witness the slow adoption of collaborative tools such as Wikis, Blogs etc. in the enterprise. Business is only now waking up to how social networking and associated technologies can help them accomplish their goals, while the technical folks have been using them for years.
One last thing. For me, this reinforces the value of good communication skills. Being an effective listener, and being able to express technical ideas to business people, is sadly a skill that not many people have. If you really want to "align with business", get better at communicating. This has the added benefit of helping you in other ways - think upwards (your boss), downwards (the people who work for you) and sideways (your peers).