Heather has a great post, Recruiters who actually know what they are talking about.
The piece that resonated with me:
I can’t imagine doing a phone interview or discussing an open position with a hiring manager without having strong knowledge of the functional space.
If you’re a hiring manager inside an organization, using an internal recruiter, take the time to teach the recruiter what he or she needs to know about how your group works. If you’re considering using an external recruiter, make sure that person understands the functional skills required and how your product is similar or different to other products (a little about domain expertise). And, if you’re a candidate, make sure you choose a recruiter who does understand the kinds of jobs you would want.
Recruiters can be invaluable, but they need to understand the position you need filled.